Balancing U.S. IT Service Dependency on India for Growth

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As the United States seeks to balance China’s rapid rise, India emerges as a key strategic partner. India is uniquely positioned with a large population, affordable labor, and world-class technological talent, making it a viable alternative to China in global manufacturing and tech sectors. The US and India share cultural, political, and linguistic ties, and both view China as a strategic competitor. These connections present opportunities for collaboration, especially in shifting supply chains from China to India.

However, there’s a growing and often overlooked dependency: America’s reliance on India for information technology (IT) services. Indian firms like TCS, Infosys, Wipro, and Cognizant generate billions in US revenue. American companies such as IBM and Accenture operate major Indian hubs, employing hundreds of thousands. Over 1,000 US firms have set up operations in India, and the H-1B visa program brings many Indian IT experts to American soil. Indians also have a strong presence in US universities and tech industries.

Unlike the US dependence on China for goods, nearly every American sector relies on India for IT support. India’s IT sector has evolved from basic services to advanced areas such as AI, machine learning, and cloud computing. A substantial amount of innovation labeled “American” is now outsourced to India.

While this partnership could help the US outcompete China, it carries risk. First, India and the US have key disagreements on regulation, data, and market access. India promotes economic self-reliance through its ‘Atmanirbhar Bharat’ initiative. Second, if India’s relationship with China improves, their combined strength in manufacturing and IT could shift global power dynamics.

To avoid repeating past mistakes with China, the US must acknowledge its reliance on India, ensure mutual trade benefits, and preserve independence while leveraging Indian strengths.

India, China, United States, IT services, digital dependency
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