Indian IT firms in US paid $22 bn in taxes in 5 years; boosted jobs: report

22 Sep 2015


Indian IT companies operating in the United States have contributed more than $22 billion in federal, state, and local taxes in a five-year period between 2011 and 2015, even as job additions by these companies grew at an annual pace of 10 per cent against the national average of 1.6 per cent, says a new report by the National Association of Software and Services Companies (Nasscom).

The report, released by commerce minister Nirmala Sitharaman on the sidelines of the US-India Strategic and Commercial dialogue on Monday, stated that the Indian tech companies through their US operations supported 156,000 direct jobs and 255,000 indirect jobs.

Also, an investment of $2 billion in technology ventures in America supported more than 410,000 jobs in the US, says the report.

The new report seeks to dispel the ''myth'' that India is bleeding US white-collar jobs and distressing its tech economy. On the contrary, it says the economic value of the operational support provided by India's IT firms to over 90 per cent of Fortune 500 firms and thousands of other American businesses ''make them more innovative, competitive, primed for new market opportunities, and eager to expand jobs.''

''Leveraging Indian talent, American firms have been able to bring cost-competitive solutions that have helped improve their global market share and bring products with shorter production cycles,'' Sitharaman said, adding that the report ''focuses on that part of the India-US bilateral equation, illuminating many of the benefits that Indian IT organisations bring to the US in period covered by the study.''

''The two-way flow of investments and intellectual talent is central to the growing commercial and strategic relationships between India and the US.,'' said Nasscom president R Chandrashekhar, noting that that the organisation has been advocating for more open markets for US companies in India, as well as for US policies that permit temporary high-skilled workers from India to support their hundreds of American customers.

Under a US law passed in 2010, the H-1B and L-1 Visa fee per application of $2,000 and $2,250 respectively, highly-skilled Indian workers contribute $70 million annually to provide healthcare and financial compensation to the first responders, including firefighters, during the 9/11 terror strike. This adds up to more than $ 350 million.

The Nasscom report also lays bare the allegation that rated Indian IT companies are the worst paymasters in the world and that Indian IT industry is creating a low-paid strata of workers, at least in India. The report asserted American national in the US were paid an average $81, 447 per year, US visa holders (guest workers) were paid $ 81,022, in addition to spending an additional $15,000 towards visa processing and other expenses.

The report also asserted that while overall unemployment in the US was 6.2 per cent, it was only 2.7 per cent in tech sector, belying the impression that foreign guest workers were adding to the US unemployment situation.

''The two-way flow of investments and intellectual talent is central to the growing commercial and strategic relationships between India and the US It's not about one nation taking unfair advantage of the other; it is about moving forward together to improve the economies, opportunities, and quality of life for citizens of both nations,'' the report said.

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