Benefits for Indian companies in opening entities in the USA.
Neeraj Agarwal
I Neeraj Agarwal, am a Fellow Member of ICAI, practicing under the banner of M/s AAN & Associates LLP, a firm based out of Banglore Mumbai.
I am also registered under Insolvency and Bankruptcy Board of India as a Registered Valuer for valuation of Security or Financial Assets (Passed in Feb 2020)
I am also holding Bachelor of Commerce (B. Com) degree from Calcutta University (Passed in 2011).
I have corporate working experience in Wipro. After working in Wipro for a short period I started my practice in late 2013 and have been in practice so far for the last 10 years. I have also completed a Certificate Course by ICAI on IND-AS in 2020. I have also cleared Social Auditor Exam conducted by NISM.
I have been inducted as a Special Invitee to the Sustainability Reporting Standard Board, ICAI for the FY 2023-24.
The deliberate entry of Indian businesses into the US market provides them several benefits in the current global economy, enabling them to achieve unmatched success and growth. Here’s the reason:
- Access to a Broad Market: With one of the world’s biggest consumer marketplaces, the United States provides Indian businesses with a diversified and affluent clientele. Indian businesses may tap into this sizable market and generate sales and income streams with their presence in the USA. The United States accounts for approximately 82.6% of its Gross Domestic Product (GDP) in terms of final consumption expenditure. This clearly shows the USA is a highly consumption-driven market where customers are ready to pay big bucks for premium goods and services.
- Closeness to Creativity Hubs: Establishing businesses in tech hotspots like Silicon Valley gives Indian enterprises unrivaled access to talent, creativity, and state-of-the-art technology. This proximity generates collaboration, stimulates research and development, and improves competitiveness globally. The USA still attracts the brightest minds from the world, which is reflected in the fact that it is the number one country in the world in terms of accepting international students.
- Attracting Funding and Investment: Venture capitalists and investors looking for exciting prospects continue to be drawn to the USA. Indian businesses may draw significant investment by establishing a presence in the nation, supporting their expansion goals, and improving their financial position. The USA leads in total international investment, easily beating its wealthy rivals.
- Increased Brand Visibility and Recognition: A physical presence in the USA helps Indian firms become recognizable and trustworthy to American enterprises and customers. Partnership, teamwork, and profitable business prospects become accessible, as a result of this enhanced exposure. In a study in 2022, the USA was ranked #1 in brand power, ahead of countries like China and Germany.
- Making Use of a Favorable Regulatory Environment: The USA has a regulatory environment that is conducive to business and is marked by strong legislative frameworks, open governance, and policies that are investor-friendly. Indian businesses may make use of these advantageous circumstances to successfully negotiate complexity and prosper in the market. The USA has been consistently ranked in the top 5 in the world in ease of doing business.
- Reducing Geopolitical Risks: Reducing geopolitical risks and strengthening resilience against economic uncertainty and geopolitical tensions may be achieved by diversifying activities across international boundaries, especially in a stable and developed economy like the USA.
- Access to Global Talent Pool: Setting up offices in the USA gives Indian businesses easier access to a large pool of highly qualified workers, which promotes productivity, innovation, and creativity. Use of this varied talent pool boosts competitiveness internationally and expedites progress.
- Strengthening Supply Chain Networks: For Indian businesses, being close to important distributors, suppliers, and partners in the USA simplifies supply chain logistics, cuts lead times, and improves operational effectiveness. This strengthened network can provide clients with goods and services.
- In conclusion, growing in the USA offers Indian businesses a game-changing chance to open up new channels for development, creativity, and success. Indian businesses may establish themselves as strong competitors in the global market and promote long-term success by using the advantages mentioned above.
Example of a famous Indian company that has benefited from opening entities in the USA:
Tata Consultancy Services (TCS) is a well-known example of an Indian business that has profited from establishing businesses in the USA. With its headquarters in Mumbai, India, TCS is a prominent worldwide provider of business solutions, consulting, and IT services.
Through several businesses and offices in different states, TCS had a considerable impact in the USA, gaining access to a sizable market, proximity to innovation clusters, and a strong talent pool. The corporation has significantly increased its revenue by using its USA companies to negotiate advantageous contracts with the US government and corporate organizations.
TCS has also expanded its service offerings and promoted collaborative innovation by fortifying its alliances with American technology companies and universities. TCS’s USA-based businesses also function as key centers for research and development, which helps the business stay on the cutting edge of technology and provide clients with cutting-edge solutions worldwide.
Ultimately, TCS’s US entry has been essential to its worldwide success story and has demonstrated the real advantages that Indian businesses can reap from setting up shop in the US.
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