Skip navigation
Newswire

Business as usual for U.S. firms in India

BOMBAY, June 3 (Reuters) - It was business as usual at some of America's largest companies in India despite U.S. government advice for its citizens to leave the country as military tension with Pakistan simmered.

The India arms of American multinationals with big operations in India such as GE , Ford Motor Co , Texas Instruments , Intel and IBM are mostly run by Indians, and the few Americans in key positions are not leaving now, a Reuters survey found on Monday.

On Friday, the United States, Britain and other western nations urged tens of thousands of their citizens to leave India and Pakistan and offered their diplomats passage home as escalating hostilities between the two nuclear-armed countries sparked fears of war.

India and Pakistan have deployed about a million troops along their border in a standoff triggered by a bloody December attack on India's parliament that New Delhi blamed on Pakistani-based militants. Their confrontation has its roots in the disputed Himalayan region of Kashmir.

The United Nations on Saturday said it would evacuate dependents of its foreign staff in India and Pakistan.

The United States has rapidly emerged as India's biggest market, taking about a quarter of its merchandise exports and 60 percent of its IT services.

Many top U.S. infotech companies have set up major development centres in Bangalore and elsewhere in India over the past decade to tap the nation's immense talent pool of English-speaking engineers and programmers.

LIFE AS USUAL

But for a number of U.S. companies there was little change.

"It is not going to affect day-to-day operations," said Balu Doraisamy, president of the Indian arm of Hewlett-Packard Co. , the world's largest PC maker.

HP, which merged with Compaq, has fewer than 10 foreigners among its 3,000 employees in India, Doraisamy said, and none in top management positions.

Texas Instruments , the world's biggest maker of semiconductors for mobile phones, has no expatriates. It employs more than 750 software engineers and programmers in Bangalore, the heart of India's infotech sector.

A spokesman at Intel, the world's largest chipmaker which has 700 staff in Bangalore, said foreigners were still arriving on business trips.

Ashok Soota, head of the Confederation of Indian Industry (CII), said the software and autoparts industries were likely to be the most affected by the advisories issued by the U.S. and other Western governments.

"In our view it's uncalled for and premature. Business is going on as usual," Soota said.

India's overall economy is unlikely to suffer much since it is less reliant on international trade and finance than other Asian countries, analysts said.

Exports accounted for just 10 percent of GDP last year, compared to 30-40 percent for Asian countries highly dependent on electronics exports.