Is India the Next Great U.S. Dependency?

David Moschella May 18, 2021
May 18, 2021

As America looks for strategies to countervail today's rapidly rising China, no nation is more important than India. Only India can match China's vast population, low-cost labor availability, and deep base of world-class technical talent. The United States and India have strong political, cultural, and linguistic affinities, and both nations see China as a military and geopolitical rival. While American and Indian interests are not always aligned, the potential synergies, including moving manufacturing from China to India, are real.

As David Moschella writes in U.S. News & World Report, there is another more worrisome dynamic. Although COVID-19 has made the U.S. all too aware of its dependence on China for many essential manufactured goods, our reliance on India for information technology (IT) and other high-tech services gets far less attention. This growing digital dependency takes five main forms:

  • America is the largest market for Indian IT services suppliers such as TCS, Infosys, Wipro, HCL, Cognizant and others, which collectively enjoyed some $50 billion in sales to the U.S. in 2020.
  • American IT services companies such as Accenture, IBM, Deloitte and DXC do much of their actual work in India. These four firms alone employ some 400,000 people in India.
  • More than 1,000 U.S. companies have set up their own operations in India, employing some 1 million people for everything from back-office IT and call centers to strategic innovation and research and development.
  • There are more than 400,000 non-U.S. residents working in the United States through the H-1B visa program. Roughly three-quarters are from India, and they are overwhelmingly in IT.
  • Americans of Indian heritage have a large and high-profile presence in Silicon Valley, as do Indian students and professors at America's elite universities, especially in STEM fields.

For far too long, the U.S. ignored its growing dependence on a rising China. So far, it has done the same with India. America needs to leverage India's vast capabilities to effectively take on China.