Indiana Woos India-based Infosys With $31 Million in Tax Breaks

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By Siri Bulusu

The state of Indiana has entered into a $31 million deal made up of tax incentives and training grants with India-based tech giant Infosys Ltd, signaling a push for technology firms to hire U.S. workers in lieu of hiring foreign workers through the H1-B visa program.

Infosys plans to invest more than $8.7 million and hire 2,000 high-skilled employees by the end of 2021.

The company announced in a May 2 news release that it would hire 10,000 American workers over the next two years and set up four “technology and innovation hubs” in the U.S.—the first of which will open in August 2017 in Indiana.

Infosys, based in the south-Indian technology hub Bengalugu, has grown into India’s second largest information technology services and consulting firm since its founding in 1981. The company employs over 200,000 workers spread across 50 countries, posted an annual turnover of $10.21 billion in 2017 and has a market cap of $36.3 billion, as of March 31, 2017.

“The Indiana Economic Development Corporation utilizes tax incentives and training grants to incentivize companies that choose to grow in or locate in Indiana,” a spokeswoman for the Indiana Economic Development Corporation told Bloomberg BNA in an email.

The $31 million deal is contingent on Infosys hiring and retaining 37 full-time employees earning $45 per hour in addition to creating 300 more full-time jobs paying an average wage of $36 per hour by the end of 2019, according to a City of Indianapolis press release.

Property Tax Abatement

Pending further approval from Indiana officials, the city of Indianapolis will offer a 10-year personal property tax abatement as well as a $2.5 million grant to reimburse the tech-giant for training.

The Indiana Economic Development Corporation spokeswoman said the state worked with Infosys as the company was deciding where to locate its four new technology and innovation hubs, and that the incentives were guided by the promise to create 2,000 new jobs in the midwestern state.

“[The] Indian IT sector shall also look into various aspects of the state before setting up their shop in any state [such as] availability of low cost employees, on-site expenses, other indirect operating costs and restrictions imposed by the state,” Neha Malhotra, executive director of Nangia & Co. LLP, told Bloomberg BNA in an email.

Malhotra said while tax incentives are nothing new to the U.S. business landscape, they are becoming increasingly important to attract foreign investment.

“Investment for setting up business operations in a foreign country are not solely guided by tax incentives,” Malhotra said, adding that there must be an overall business case supporting the investment.

To contact the reporter on this story: Siri Bulusu in New Delhi at correspondents@bna.com

To contact the editor responsible for this story: Penny Sukhraj at psukhraj@bna.com

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