Impact of American Investment in India

A Socioeconomic Assessment

Saon Ray‚ Smita Miglani‚ Neha Malik

India’s economic growth story in the past decade has invited a keen participation by the global investors, manifest in the increasing foreign direct investment flows to India especially, since the mid-2000s. Rise in the direct global inflows has ensured considerable direct as well as knock-on benefits to India. Investment by the United States has been prominent in this regard.

This study investigates the socioeconomic impact of American investment in India and identifies the challenges faced by the American investors. A multi-sector survey, based on in-person interviews with the key stakeholders, has been juxtaposed with relevant secondary data to elucidate the spillovers of the direct investment by the US. This may serve as an appealing read for an eclectic audience ranging from academia and research firms, consulting houses to university graduates.

Saon Ray is Senior Fellow at Indian Council for Research on International Economic Relations (ICRIER), New Delhi. Her areas of interest include international trade, industrial economics, microeconomics and applied econometrics. She has a PhD in Economics from the Jawaharlal Nehru University (JNU), New Delhi, on the role of intellectual property rights in transferring technology to developing countries. She has worked in the area of trade policy, technology transfer, foreign direct investment, efficiency and productivity issues, behaviour of firms, energy and climate change related issues. She is currently engaged in projects that examine link between climate change adaptation and competitiveness of cities; and evaluating India’s participation in global value chains. She has publications in various national and international journals as well as in edited books.

Smita Miglani is a Research Associate at ICRIER. Her broad areas of research interest include international/domestic trade and investment, energy and infrastructure studies. She is an MPhil in Economics from JNU. In the past, she has done studies in the areas of international trade and investment, climate change, renewable energy and transport sectors. Her work has contributed to India’s negotiating strategies in signing bilateral trade and investment agreements and other policy reform issues at domestic level. She is currently engaged in projects that involve evaluating India’s participation in global value chains. She has published work in working papers, edited books and refereed journals.

Neha Malik is a Research Associate at ICRIER. She completed her Masters in Economics from the University of Manchester, UK. She has worked on projects such as “The Macroeconomic Impact of Financial Crisis 2008-09: A Capital Account Analysis of Germany, India and Japan”, “Impact of Transaction Taxes on Commodity Derivatives Trading”, “Securities Transaction Tax in India: Motives, Revenues and Effects” and is currently involved in a project on “Covered Bonds: A Complementary Source of Financing Mortgage Lending in India”. Her areas of interest include international finance, monetary and macroeconomic issues.