Outsourcing As A Source Of U.S. Jobs

An anonymous reader writes "The Economic Times, India's leading financial newspaper, reports that Diana Farrell, Director, McKinsey Global Institute during her speech at Nasscom 2004 said that Bureau of Labour Statistics is predicting a job gain of 22m in the US by 2010, against a job loss of 2m, due to offshoring. You can read the full article here."

Some more statistics on the subject

[prostoalex]

US unemployment right now is 5.6% [itfacts.biz], the lowest it had been in 2 years.

Silicon Valley will ad 17,000 jobs this year [itfacts.biz] and 33,000 next year.

in the long term

[tsunamifirestorm]

in the long term, a foreign country succeeding will make the entire world better...
of course in the long term, we'll all be dead.

Re:Some more statistics on the subject

[Eskarel]

Unemployment statistics are trash. They don't include recent college grads or those who have been unemployed for a prolonged period of time because no one bothers to register unless they are eligable for unemployment benefits. After a while people are no longer eligable and so they stop registering as unemployed, the statistics assume they are employed which isn't necessarily the case.

So in short

[AmVidia HQ]

Offshore was about global wealth creation and integrating economies, she explained, adding that it would create more high-value jobs in the US than people could imagine today

So we are going to get more CEOs and less "lowly programmers"?

I'm Canadian btw, but we all know it's just another economically annexed state.

But what *kind* of jobs?

[JakiChan]

My worry is that the economists say "Oh don't worry, we'll replace those jobs." But not with anything I've remotely studied to do. A job at my current level may not be available or even practical. Most places won't let you get a second bachelors degree. And somehow I don't think a university will accept me for a chemistry masters program when I have a degree in Computer Science. Sometimes I get the feeling that to these economists going from being a skilled worker to a Deliverator is acceptable as long as I'm employed.

I used to think the reality portrayed in Snow Crash was just current trends taken to some unreal extreme. Now as I watch the destruction of the middle class I'm not so sure.

China makes a lot of "American" goods

[gtshafted]

First of all I'm Chinese American so don't mistake this as a racist rant... anyways being that the US's physical goods are being made in China and the US's abstract products are now being made in India - who profits in the US? I only see high ranking execs (CEO's, etc...) and people who own a ton of stock - making any money. What happens to the middle class? Will the US keep having a middle class?

I'd like to believe, but

[NixLuver]

I just don't see this as a big motivator to the US economy. The 'savings' of outsourcing are mostly in the form of taxes not paid to the government (by the time the infrastructure - ie, Stateside project manager, Stateside liason, overseas liason, overseas management, and programmers, the actual salary savings is fairly small). Also, the profits of this reduced cost simply are not going to be realized in reduced cost of the product, but in terms of lining the pockets of the major stockholders (I hope I'm wrong, but history would suggest differently).

The largest percentage of the outsourced jobs are high-paying; perhaps we'll eliminate a single 80k job and replace it with 4 20k jobs? Or does somebody think that American business is going to hire local techies to architect products and the humble outsource labor forces will selflessly implement the design?

I have nothing against India or the programmers that are taking advantage of the avarice of American companies in order to better themselves. I would do the same thing in their shoes.

I do, however, blame an American business culture where todays stock prices have become more important than the ultimate survivability or long-term health of the company. After all, on a long enough timeline, everyone's surviveability is zero, eh?

Peaks and valleys

[yintercept]

Of course, if you looked at the stats in 1999, you would see the tech boom was pulling people out of retirement, it was pulling students out of school. A very large portion of the "lost jobs" stat was people who came from India because of the "labor shortage" in the US. What your 2.2 million stat does is compare peaks to valleys. In 2000, the papers were telling about how the brain drain was hurting countries like India. I am extremely happy that the globe is starting to see some economic balance.

I smell bull

[shaldannon]

Diana Farrell, director, McKinsey Global Institute, said, "People in the US are looking at it as a job issue. They are not economists and therefore, they don't necessarily see the whole picture. What's going to happen is that offshoring is actually going to benefit US businesses even more than India." She said it was a profoundly new way of doing things and would change the structure of organisations. Offshore was about global wealth creation and integrating economies, she explained, adding that it would create more high-value jobs in the US than people could imagine today.

Based on the research that the McKinsey institute had carried out, Ms Farrell said conservatively, for every dollar invested in the offshore space, $0.58 was directly saved. This could be either redistributed to investors or customers. But she added that there were indirect benefits to the US, in terms of the import of US goods and services into India by Indian service providers, and so there was some transfer of profit back to the parent in the US. She pointed out that the Bureau of Labour Statistics was predicting a job gain of 22m in the US by '10, against a job loss of 2m due to offshoring.

I'd like to know what she's smoking. I see a lot of this as someone with a comfortable job spouting off:

1. Job loss in the last few years has continued unabated in the tech sector. By all reports, the new jobs created have been nontechnical, particularly in construction.
2. This doesn't account for the fact that many people have dropped out of the labor market altogether (going back to school, early retirement, panhandling).
3. Economists have a pathetic record for prediction. Right now we're in what's been termed a "jobless recovery." If that's a recovery (I remain unconvinced) then just where does Ms. Farrell see those 22 million jobs coming from in the next 6 years, and just when does she think they'll appear?
4. Additionally, Ms. Farrell claims that cost savings from shipping jobs overseas will be passed on to the consumer. Ignoring the tendency of corporations to pass cost savings on to executive compensation rather than to stockholders or even (gasp!) consumers, just how would consumer savings help the average unemployed Joe on the street get a new productive job?
5. On top of this, consider the setting for the comments. Ms. Farrell is telling a group of people in India not to feel bad about taking our jobs because eventually we'll turn out better than we started out. This is yet more bull in an article already reeking of manure. All it is designed to do is assuage someone's conscience.

It's one thing to say something substantive on the subject, but all that's been presented is trite expressions of hope that things will get better. I'm sure I'm not alone in hoping that they do get better, but until something meaningful is said, it's only so much bull.

Re:But what *kind* of jobs?

[Anonymous Coward]

I can already point to a real economy which offshoring has destroyed, and retail jobs now outnumber manufacturing ones: Pittsburgh. Once the manufacturing capital of the world, Pittsburgh now, according to a local paper, "has more people selling goods than making them" How can this work? About 13% of the population is employed in the retail sector, only about 11 or 12 now in manufacturing. But it is interesting to point out though that US Steel is now making more steel than it ever could back in the heydays when they had 100,000 employees.

I am not sure I buy it, but I have

[PotatoHead]

been thinking about this lately. (I am still employed, but my company is having a pretty rough time right now.)

We are going to see more jobs. If Bush gets his way, most of them are going to be in competition with 'undocumented' (Ahem..), I mean ILLEGAL workers. So, we all know those are not going to pay well. Lots of people are going to be devalued for sure.

Jobs that involve people skills are going to become more important. Somebody needs to manage the teams, make deals, and other things. I have been seeing another trend along these lines as well.

Working professionals are forming groups to cut overall costs. So far I see this happening with law, accounting, taxes and other similar traditional services, but maybe technically oriented groups have a chance doing this as well.

Having your own in-house technical people may be too expensive, but buying some quality time locally, sans language and distance issues might be worth a small price premium. Personally, I hope this is an area that Open Source can begin to play a little harder.

I can't help but wonder what effect the growing license fees companies, like Microsoft, ask each year have on the job market. There are a lot of dollars going to one place that used to go elsewhere.

With Open Source working as it should and some greater degree of acceptance, perhaps some of this money will be distributed more evenly. Companies could choose to keep minimal staff and pay high license fees for one size fits all software, or...

They can choose to employ some more staff and combine that with services from a number of competing firms to solve their problems. The greater number of potential solutions might yield competetive advantages as well depending on who is involved.

If this sort of thing begins to really happen, polishing up those people skills might be the way to go. Your technical background will be valuable for advising execs on critical decisions and evaluating potential partners.

I have been getting some experience doing this on the side for a little while now. Once the execs learn there is a cheaper way, they need people to facillitate getting it done for them. Being able to work hands on, in a pinch, helps as well. I sort of ended up doing this for a couple of people I met when I began networking a couple years ago. (fear drives a geek to do strange things, I know!)

Thinking along these lines seems better than a long job search in any case. So, here it is, for what it is worth.

Anyone doing anything similar? Have any luck? Suggestions? I just might need them soon!

maybe I'm missing something

[Wansu]

"Apart from huge savings, it allows US companies to concentrate on their core competencies and the people (in the US) can move on to higher paying, more creative, more value generating jobs."

What higher paying, more creative, more value generating jobs?

Re:Exportable Jobs (2nd try)

[Esion Modnar]

(My goddam browser fucked up, let's try again)

Manufacturing jobs (but we already knew that).

And now thanks to the Internet, intellectual jobs, which would include (but is certainly not limited to) programmers, tech support, accountants, scientific research, financial research, and eventually, executive positions within companies.

The only jobs that won't eventually export are those which require a physical presence, such as police, fire fighters, doctors, auto mechanics, retail sales clerks, burger flippers, etc. (But I'm sure we can import some people for those jobs, or replace them with robotic telepresence... eventually.)

Actually, the only job in this country which is guaranteed not to be outsourced, is President of the United States. But I hear the pay is lousy and the hours are long.

Re:Poor wording

[Concerned Onlooker]

They are not economists and therefore, they don't necessarily see the whole picture.

Yep, that'd be me. I certainly don't see the whole picture when I've been harped at for years to "buy American" only to see the corporations buying foreign when it comes to labor. Go ahead and call it sour grapes but I'll be looking for creative ways to "offshore" my money in the form of purchasing products from overseas. Yes, I know. I'm probably just making the problem worse.

Re:Sauces, use thereof

[johannesg]

But if the article is true, they will (in the end) be paying the US far more than the US is paying them. If that is true, and assuming they can do the math, why would they go along with it?

HP's Outsourced Support Quality

[PizzaFace]

A data point on the quality of outsourced tech support:

My neighbor's HP Pavilion kept putting a window on her screen last week, saying her Windows license had expired, and that she needed to enter her credit card number and expiration to validate her copy of Windows, but not to worry because her credit card would not be charged.

My neighbor is in her 80s, but her memory is good and she didn't remember anything about an expiration date for Windows. So she called HP support and got a man with an Indian accent. She told him the problem, and he asked, "How old is your computer?" She told him it was a couple years old, and he said, "If it's that old, Windows could be expired. Try entering the information as requested and see what happens."

Fortunately, my neighbor is much smarter than HP's outsourced call center, and didn't take their advice. She called me and we cleaned mimail.s [symantec.com] off her computer. She promises she won't buy from HP again.

Re:in the long term

[Savage-Rabbit]

The phenomenally poor in India are seeing a big jump in their standard of living, while the fat American is simply seeing a slow down in their accumulation of wealth.

It is not the phenominally poor in India who are benefitting from the export of high tech jobs it is India's upper and middle classes. India has a cast system and the people who are benefitting from this would rather drown than touch a rope that has previously been handled by one of Inda's phenominally poor low cast "Untouchables", unless of course the rope was ritually purified first.
It seems to me this has alot less to do with "fat Americans" and more to do with "short sighted greedy little American corporate executives" who are pissing away a highly trained workforce for short term gains and making a present of high technology to India which is only too happy to accept it since the technological exchange will eventually allow her to dispense with the Americans and compete with them.

Re:$22 million in jobs

[rcs1000]

If they buy land, then they buy it from somebody. The person that has sold the land now has the money in his (or her) pocket.

If they spend their money overseas, then it creates jobs in Italy or Taiwan, and the money is spent on video games made by Nintendo or Electronic Arts.

Which means these companies make a profit, which is good because otherwise your 401K would be empty and you wouldn't be able to afford to retire.

Re:22 million jobs

[arc.light]

not $22 million in jobs.

Just to stay even with the number of new workers entering the workforce, the US needs to add 300,000 jobs per month. Multiply 300,000 by 12 months by 6 years (the difference between now and 2010) and you get 21.6 million, a number suspiciously close to the 22 million cited in the article. I'm guessing that the job creation number is based on horseshit.

Outsource McKinsey

[Anonymous Coward]

How many of those 22 million jobs created will *themselves* be outsourced? The barriers that existed in the world before no longer exist. Information flows freely. That means Indians and other people can acquire skills that previously only Americans had. Why wouldn't the "higher value" jobs be outsourced? Is there some indication that Indians are not creative or will not be able to develop "higher value" skills? Sure the Indian economy will develop and Indians will buy more. Will it be the US selling them more? Probably not. China would be the first in line.

The rich, backwards

[sybert]

You have this completely backwards. The rich spend a far smaller percentage of their income on land than the middle class. The middle and lower class have to mortgage heavily to buy property, the rich usually do not. The poor are the biggest bargain shoppers, and are most likely to buy cheap imported goods. The rich don't shop at Walmart very often, and can afford to pay higher prices to buy American. Luxury goods create the most jobs, since most luxury items are actively in the design-phase. Design jobs pay very well and are the jobs least likely to leave the USA. The poor mostly purchase more mundane items that have been in the competitive marketplace for a long time. Margins for these products are slim and productivity for these products has been maximized, so few new jobs are needed to produce more.

A flat income distribution is an indication of economic stagnation. We just found a group trying to escape socialist flat-income Cuba paddling a '50s Buick because they have not produced any new products there since the revolution. The more important a product is to the middle and lower class, the higher the productivity is to produce these products, and the fewer jobs needed to produce them. The more rich people there are, the more new products are created and more people are required to design these new products. Almost all products available to the middle class were once products that were affordable only by the rich.

The wealthy don't need to spend all of their income. The excess is called capital. It is by investing this capital and labor (read: new jobs) that new products are created and our economy grows. This capital is the most important capital because it is the least risk-averse (no board of directors or bureaucracy controlling it) and is more likely to fund the most risky, innovative new products. Cutting tax rates increases the amount of this high-risk capital. Higher risk on average creates the highest expected rate of return. The lower tax rates on the higher expected profit and labor costs increases total tax revenue collected in the long run.

PS: How many programming jobs would there be in the USA if not for all the cheap imported memory needed to run our massively bloated code.

Re:Right...

[luckylindy]

I work for a company that makes various displays for the avaition industry. Many of the processes in making them are proprietary and also export controlled. Because they are export controlled the company still manufactures all of the product in the US and is vertically integrated. The products sell well all over the world and have a high margin of profit. There is no doubt in my mind that if the export controls were lifted or modified to be less constrictive that the corporate officers of the holding company would move production to mainland china within 2 years and instead of having 450 employees in this division there would only be about 25 management types. I think that the rules for small, medium and large companies should have more export controlls, and tax advantages should be geared to those business who employ 80% of their workers in the US of A. Those who move their business off shore for reduced cost but claim to be US business should have all tax benefits sundered, should have their products directly tariffed and to hell with the European Union meddling in US internal laws. I used to be a conservative voter and god knows both sides of the political thin coin that is our 2 party minority takes all system have great guilt in decimating our economy but Ross Perot was right all along. The giant sucking sound is the sound of all the decent paying jobs not only going south of the border but even leaving North America entirely. I will be voting very left wing in the next years as I head toward the vanishing goal or retirement. Our economy is ill served if we all work for mainland China ( excuse me: I meant Wall Mart).

A Questioning Of CEO Logic

[beforewisdom]

The people who control the US high tech companies are billionaires or at least millionaires several times over.

Its not about the cash for them anymore. Its about points, being the top player in the game for the thrill of it, and staying in the game.

Given that it is about staying in the game, outsourcing jobs to India is irrational because it will ultimately put them out of the

Indian tech workers are smart, politically aware, and socially aware.

They will not be content with the American business colonialism of outsourcing.

They will use outsourced American jobs to build up funds and to learn how to run tech companies( or given our greedy, short sighted, overpaid American CEOs.....how NOT to run a tech company)

Once they do, they will form their own Indian owned tech companies.

Unlike the American tech companies paying Indian wages and selling their products at American prices these early Indian owned tech firms will sell their products at Indian prices.

They will either drive American Tech companies out of business or their competition will severly limit their profits.

In short, American CEO jobs will be outsourced to India in the end. They will be out of the game

Steve

Re:Tired of this offshoring whine on /.

[tarunthegreat]

Well I'm a software programmer in India working for a company that outsources. Most people working over here are pretty similar to you guys (which is the point that Wired was trying to make)...all college educated people happy to get a 'stable' job which pays really well and allows us all to be able to pay a decent rent and buy cars and stuff. We do feel awful about the fact that ppl in USA are going to lose jobs...but the fact is it's not our fault American companies are coming here to scout for work. We need jobs, and they are offering, so naturally we're gonna take them. And they are paying us MORE than what we would be making otherwise. It is cheaper than America, but HIGH and COMFORTABLE by Indian standards. That being said... most of the work we get here is "Grunt Work". I'm responsible for 'maintenance' i.e. fixing bugs between release 4.1 and 4.1.1. That kind of stuff. It's a rare day we get to sit down and design an operating system, say, or a piece of software which actually can do something worthwhile. Most of us here feel that those kinds of fun things are given to the Americans to do in America, and to only call us if things break(or if they get bored with their product)....Many of us actually want to go to America and live there...failing that, having America come to us was the next best option...and many people like these jobs because it gives them an opportunity to go aborad (necessary for technology transfer)...
That is the Software perspective... The call-centre perspective is totally different. Call-centre people have to work all kinds of awful hours (8 pm to 6am) they have no social life and all kinds of health problems. On top of that, they have to deal with unruly, irate customers, among other things. Not a SINGLE person working in a call-centre here loves his/her job. They are just doing it for the Money. To make ends meet. Most people working in call-centres are people with reasonable college degrees but no scope of getting employment elsewhere. Everyone who works in a call-centre knows s/he will quit in a year and do something else with their life - the churn rate is VERY HIGH. Anyway - THAT is the Indian Perspective and the ground reality. Guys there's nothing constructive we can say to you - We are truly sorry that your jobs are being taken, but we didn't do the stealing - your CEOs did. I've been fired, I know what that's like.
And the truth is, many of us feel it is a good thing because it is putting more money in our pockets, and giving us a better life...but unlike you guys, we have no social security benefits if we lose our jobs.. I don't expect any pleasant replies to this, just giving a point of view from the land of Kama Sutra, Cow-Worshippers, Towel Heads, Sand-Niggers, Curry Munchers....

Re:Sauces, use thereof

[Carnifex487]

If my high paying Programing job has been outsourced to India and I am now working for Wal-Mart for $5.50 an hour, what "Toys" would I be buying ? Isn't it more likely I would be trying to figure out how to pay rent AND eat this month ?

Re:in the long term

[cybermace5]

Ok, I'll bite: if the Indians perceive this as merely putting the fat Americans in their place, maybe they should remember that all those fat Americans somehow, in spite of their slothlike lazy habits, produced all the wealth that countries like India are siphoning out. And if they don't care about the fate of American workers, why should we care about theirs? "Oh, it's only serving to equalize the number of jobs, and the wealth." Come on! The cost of living in America is very high compared to that in India. You have to spend a lot of money to survive. While programmers in India get wages that allow them to buy large houses and retain servants, the average tech worker here is struggling to hold down a two-bedroom and make car and student loan payments.

Re:Sauces, use thereof

[BJZQ8]

I believe preserving this country's standing as a dominant world power is morality enough...certainly equal to the morality of putting a hard-working American out on the street after 30 years of labor for a company. If it were only a question of morality, we would be dividing up our cumulative wealth and spreading it equally about the earth; but the reality is that is we MUST not do that, lest we be equally divided in national strength.

Comrades, Don't Unite

[wildnight]

Ok everybody just take a deep breath. It's not time to flush capitalism yet. Keep a few points in mind: 1) For at *least* 15 years we have all done *very* well in tech (last three years notwithstanding). 2) The tech employment sector was over served and overpaid. Come on now! I personally approved $50K and up for hires without college degrees and in their early 20's. Very early. 3) We are in the middle of a re-adjustment. It's painful but it is overdue. Those with solid skills (beyond the programming language of the moment)will do fine. And by skills I mean: business/technical writing, project/time management, etc. You know, job skills. 4) This outsourcing thing is a fad and will settle out with a relatively small percentage of the tech sector able to be outsourced. Capitalism will re-assert itself. The crappy Indian programmers will be cheap, and you'll get crap from them. The good ones will be more expensive. The additional overhead of working from across the miles and cultures will also take its toll. 5) Now is the time to be sharpening your *GENERAL* skills and reminding yourself that the latest coolest tech is not your job security. The ability to add value to the organization, be a productive part of a team, provide and meet deadlines, follow standards, etc., will see you through. For what it's worth, my lifestyle has taken a terrible hit lately. I've even considered going to ack! cough! law school. But I don't blame it on the Indians. Tech was very very good to me.

Re:Sauces, use thereof

[BJZQ8]

Well we can produce less as we ship it all overseas. I have been in the manufacturing industry in the past, and one of the larger problems is becoming finding tool and die makers. After all, it's nice to internet this and program that, but somebody has to make the die that stamps the case out for your computer. In the 80's, apprenticeship programs were eliminated left and right, as we would theoratically never need such "old style" skills anymore. Things were shipped overseas and the entire skill pool in this country evaporated. I can see the same thing happening across the board. Just extract this situation to its logical conclusion; every job here is outsourced to India/China/etc. What is left in the US?

the economic times article is a fluff piece

[Uzik2]

They repeat claims with no explanation of
those claims. The claims are made
by people with no mention of the credentials
of the speaker(s). Why should I believe these
unsubstantiated claims by people who might
have no more informed opinion than the
dog catcher?

Re:Explain it to me....

[cayenne8]

I can't get anyone to explain it to me. How will this global outsourcing economy help me? My job is thrown offshore. No jobs left that pay a decent salary in the US....if people can't get work that pay good salaries, who will be there to buy those 'cheaper' goods? You HAVE to have a decent paying job, enough for some disposable income to be able to buy all these things being produced.

This explanation in the article...to me looks like to make it in the global economy, you have to make your living off the stock market, and I'd dare say, that is a LOW percentage of US citzens.

Re: Investment Where?

[Anonymous Coward]

well, first of all your assuming that infact the corporations invest it anywhere.

Look at MS, record profits, and 40BN in the bank. the bank is not investment, the money is doing nothing but sitting there.

Look at increasing corporate salaries, yeah they invest it, into their own pockets.

Look at investors, who get the dividends, they invest it back in the stock market mostly, which then gives the average CEO more money to pour back into his pockets.

Seeing a pattern here? It's called concentration of wealth. And it never ever leads to good things.

Re:Central planning falacy. All "jobs" not equal.

[MrScience]

My wife tells me all the time that this goes back to Women's Lib... All the women wanted to work, to be equal, etc. etc. Well, now the economy is geared for a two-income family-- it's expected.

We've been able to get by on just my income so she can raise our three kids... but it can be tough.

Not meant as a troll, just passing on one female's perspective.

Soft Landing

[Tablizer]

While I agree that the shift is probably innevitable in the long run, steps can be taken to reduce the pain to those *currently* in the field. These include:

1. End the longer-term "tech" work visa programs immediately, and clamp down on shorter-term visas.

2. Limit offshoring in government contracts for at least 5 years.

3. Put into place laws that restrict sensative customer and medical information from being processed overseas.

4. Officially suggest to schools not to promote IT education.

On the one hand it seems many want to keep a strong "tech base" in this country for national security and "cutting edge" reasons, yet they don't want to pay for it. The gov subsidizes farmers. Are farmers a more strategic resource than tech workers? You can't have it both ways. You cannot force people to go into a dying field. They seek stability and money, both of which are rapidly dissappearing.

Re:Poor wording

[jelle]

The same economists that claim to have the whole picture have been overoptimistic [cnn.com] about the job market for 14 months now. While some finally are beginning to wonder if they have been wrong, others seem to be following the 'if you lose the bet, double your next bet' destructive strategy.

Economists have been wrong before, and have denied that before too.

Re:$22 million in jobs

[jafac]

The problem with this is that we don't manufacture anything in America anymore.

I recently hosted a Chinese exchange student for a week. We took him shopping so he could buy some gifts for his friends back home, and we couldn't find a damn thing he couldn't buy back in Shanghai - cheaper. Even at Wal Mart.

Re:Well look at that

[Anonymous Coward]

The thing that winds me up about America is that it is quite two faced (as a country I mean, this isn't a criticism of any individual Americans). On the one hand, it's happy to boast about high moral standards and personal freedom. But on the other hand, it's always after world dominance and evangelism of democrary. The way I see it, it can be a self-proclaimed moral policeman, or it can be a power-hungry country that screws the whole world up, but it can't be both.

Now how crazy does that sound.

Grow up, my friend. National policies are not what you can decide sitting at home, there are shades of grey all over. Once you appreciate this better, come back, and we can listen to you.

India doesn't need aid anymore

[aat]

Yes, India shouldn't get aid, since:

1: India gives developmental assistance (mostly to neighboring countries like Bangladesh, Sri Lanka, Nepal, and Bhutan).

2: It's a creditor [go.com] to the IMF [imf.org] (International Monetary Fund).

3: It's written off loans for some desparately poor countries (mostly in Africa).

4: Foreign Aid is a very small part of India's GDP, at least when compared to Israel and Egypt. It's symbolic for India more than anything else.

5: America _now_ accounts for an insignificant amount of India's foreign aid:

"The United States accounted for 8.6 percent of all of the aid India received from independence through FY 1988, but for only 0.7 percent in FY 1989 and 0.6 percent in FY 1990." source [allrefer.com]