California is surpassed only by Texas, New York and New Jersey in the number of Indian companies with offices in the state, but ranks sixth in the amount of foreign direct investment, according to a report by the Confederation of Indian Industry.
Indian companies invested $22.6 billion in the U.S. in 2019, according to the CII report, titled “Indian Roots, American Soil.” In total, 155 Indian companies have operations in almost every state across the U.S., employing more than 125,000 people. Indian companies have spent more than $900 million in research and development in the U.S., according to the CII report.
Introducing the findings of the report Aug. 6 at the “U.S.-India State Spotlight Webinar on Doing Business in California,” a virtual webinar, Shuchita Sonalika, director and head of the Confederation of Indian Industry, North America, clarified that these are companies headquartered in India, and distinguished them from companies in the U.S. founded by Indian Americans.
Seventy-three percent of Indian companies with offices in the U.S. said they want to invest more. Almost all said they want to hire more employees, said Sonalika, adding: “We need forward-thinking policies that combat the arising anti-global sentiment.”
The event aimed to encourage India’s business leaders to invest in California, and was co-sponsored by the U.S.-India Business Council and the U.S. Chamber of Commerce.
In 2019, Texas received the most FDI from India, with investments of over $9.5 billion: the state hosts 40 Indian companies, largely in the IT sector, which collectively employ almost 18,000 people.
New York and New Jersey together received $5.2 billion in Indian FDI, hosting 70 companies in the region, which collectively employed more than 14,000 workers.
California ranked sixth on CII’S list, attracting a little more than $858 million. The state hosts 34 Indian companies, which employ 8,287 people, overwhelmingly in the tech sector.
California Lt. Governor Eleni Kounalakis kicked off the briefing with a recap of her visit to India last January with a trade delegation organized by the Bay Area Council. “We want India to be one of our top 10 trading partners. It is a robust relationship, but with lots of room to grow,” she said.
India is currently California’s 11th largest export destination. In 2019, California exports to India brought in over $6 billion. India is the largest buyer of California almonds, buying almost $600 million of the product in 2018, much of it grown by Indian American farmers.
Indian American Anurag Varma, head of Global Government Affairs for Infosys, had also joined the trade delegation to India. “The visit underscored the fact that the U.S. and India have a huge connection, but India and California aren’t quite there yet. He said California was a natural fit for Infosys.
Emily Desai, who serves as California’s Trade and Investment Representative to India in the Governor’s Office of Business and Economic Development, characterized the state as “the rocket fuel of the nation,” noting that its economic growth has outpaced the nation’s. California is the world’s fifth largest economy.
As the world focuses on post-pandemic economic recovery, California is competitive in many sectors, said Desai, noting that the state leads the world in life sciences innovation, creating $177 billion in annual revenue. South San Francisco is the birthplace of biotech, but Desai noted there are clusters around the state including the Sacramento area; San Diego, also a biotech hub; Orange County, which is home to a large number of medical device and digital health companies; and Ventura and Santa Barbara.
California is also leading the world on clean-tech and has moved the needle on climate change, said Desai.
Maria Onorato, a foreign direct investment specialist at the Governor’s Office of Business and Economic Development, which is also known as GO-Biz, said the state has put together a checklist to walk foreign investors through the incentives California can offer.