The economic slowdown of the US has forced small and medium firms to explore the opportunity of doing business in India — a high-growth market economy. American companies see excellent opportunities here, in part due to India’s average annual growth rate of more than 7 per cent, its fast-growing middle class of nearly 400 million consumers with growing purchasing power and the country’s favourable impression of US products and services.
“Emerging economies like India, even with a growth rate of 7 per cent, are high-growth markets for us because there has been a negative growth in the US,” said Raymond J Ellis, vice-president, Export-Import Bank, US at the sidelines of a conference in New Delhi.
Through a first ever public-private initiative, led by FedEx in collaboration with the US Commercial Service, a 15 member delegation comprising representatives from several sectors including, automobile, healthcare, electronic equipment, chemicals, architecture and energy products has come to India to examine the possibilities of business tie-ups with mid-size Indian firms.
“India is a fast-growing market with enormous potential for increased sales of innovative US products and services, contributing to jobs and economic growth in both countries,” said Israel Hernandez, commerce assistant secretary and director general of the US and foreign commercial Service.
The delegation would be travelling to New Delhi, Hyderabad and Mumbai to enable US businesses to better understand trade opportunities across key economic hubs in the country. In addition, it will help Indian companies looking to pursue new buying opportunities with American businesses.
“This is an important step toward strengthening US-India business ties and enhancing fair, two-way trade between both countries,” added Hernandez.
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India is amongst the 20 largest trading partner of the US and it is the 16th largest exports market for the US. According to the estimates, the bilateral trade between the two countries stood at $ 42 billion and is expected to touch $60 billion by 2010. Trade between the two countries is up 21 percent through the first half of 2008 compared to the same time period last year.
Despite the contraction of the US economy, some pockets have been growing with the growth of exports been consistent and so now the SMEs in the US wants to tap the vast opportunity present here, said Hernandez.
To get a foothold in India, association of manufacturing technology (AMT), US wood machinery manufacturers' association and association for suppliers of printing, publishing and converting technologies (NPES) are in the process of setting up offices at Chennai in Tamil Nadu, Bangalore (karnataka) and Gurgaon in Haryana respectively.