UC San Diego economist explains interconnected economies, H-1B visas, and Global Capability Centers linking American and Indian growth
Quick Summary:
UC San Diego economist Achyuta Adhvaryu explains how U.S. and Indian economies are interconnected through talent movement, H-1B visas, and 1,800 Global Capability Centers employing 2 million professionals. The partnership, worth $65 billion annually, demonstrates how skilled immigration and innovation collaboration benefit both nations’ prosperity.
SAN DIEGO — The economic futures of the United States and India are more connected than ever before, with flows of talent, technology, and innovation creating a partnership that benefits both nations, according to new research from the University of California San Diego.
Achyuta Adhvaryu, professor of economics at UC San Diego’s School of Global Policy and Strategy and director of the 21st Century India Center, explains how the two democracies have built an economic relationship that extends far beyond traditional trade, creating shared prosperity through skilled workforce exchange and technological collaboration.
Beyond Trade: Talent and Innovation Define U.S.-India Economic Ties
The U.S.-India economic relationship has evolved from conventional goods trade into a sophisticated network driven by the movement of highly skilled professionals, scientists, engineers, and entrepreneurs who power innovation in both countries.
“The relationship has evolved far beyond trade in goods. It’s now defined by the movement of ideas and skilled people who power innovation across both countries,” Adhvaryu stated in a recent interview.
Many American companies now depend on highly trained professionals in India through Global Capability Centers (GCCs), specialized hubs that handle everything from product design to artificial intelligence strategy. The success of U.S. firms increasingly relies on these deep collaborative networks spanning both nations.
H-1B Visa Program and Economic Liberalization Fuel Partnership Growth
The current U.S.-India economic partnership resulted from two key developments: India’s economic reforms in the 1990s and U.S. immigration policy that encouraged skilled worker mobility.
When India liberalized its economy in the 1990s, the country became significantly more open to global business collaboration. Simultaneously, the H-1B visa program in the United States encouraged more Indian nationals to pursue STEM education and high-skill careers in America.
“Some of those professionals stayed in the U.S.; others returned home to build new capabilities. That created a feedback loop — a ‘brain gain’ that has benefited both countries,” Adhvaryu explained.
This “brain gain” phenomenon contradicts traditional “brain drain” concerns, demonstrating how skilled migration can create value for both sending and receiving countries when professionals either stay abroad, driving innovation in their host country, or return home with enhanced capabilities.
Global Capability Centers: $65 Billion Innovation Hubs Connecting Two Economies
Global Capability Centers represent a cornerstone of the U.S.-India economic partnership. These facilities are not manufacturing plants but rather satellite innovation hubs serving as extensions of global teams for major corporations.
Key Facts About Global Capability Centers in India:
- Number of GCCs: Approximately 1,800 centers currently operate in India
- Employment: About 2 million professionals work in these facilities
- Economic contribution: $65 billion contributed annually
- Primary beneficiaries: Major U.S. companies including Apple, Google, and Goldman Sachs
- Functions: Product design, AI strategy, research and development, and advanced services
These centers enhance American firms’ productivity and global competitiveness, enabling U.S. companies to innovate faster while managing costs effectively.
Impact on American Prosperity and Economic Growth
The U.S.-India talent partnership extends beyond corporate benefits to affect everyday American prosperity, according to Adhvaryu’s research.
“When U.S. companies innovate faster, they create better products, new industries and more jobs here at home. The partnership with India helps make that possible,” he noted.
The collaboration keeps development costs manageable, accelerates innovation timelines, and strengthens America’s competitive position in cutting-edge sectors including artificial intelligence, biotechnology, and advanced technology industries.
Risks of Weakening U.S.-India Economic Connections
Policy changes that restrict talent movement or complicate collaboration could disrupt the economic system benefiting both nations. Adhvaryu identifies several potential risks:
- Visa restrictions: Higher H-1B visa fees or processing barriers could limit skilled worker mobility
- Trade barriers: New protectionist policies may reduce business collaboration
- Investment slowdown: Erosion of trust between the two countries could decrease cross-border investment
- Competitive disadvantage: When the U.S. restricts partnerships, other countries including China may capture opportunities
“When trust erodes, investment slows. And when the U.S. pulls back, other countries are ready to step in,” Adhvaryu warned.
Policy Recommendations for Sustaining U.S.-India Partnership
Rather than restricting international collaboration, policymakers should pursue balanced approaches that protect domestic opportunities while maintaining pathways for high-skill talent and innovation partnerships.
Adhvaryu recommends:
- Workforce development: Supporting education and training programs domestically
- Open talent pathways: Maintaining accessible routes for high-skill immigration
- Innovation collaboration: Encouraging research and development partnerships between U.S. and Indian institutions
- Non-zero-sum thinking: Recognizing that U.S. and Indian prosperity are interconnected rather than competitive
“The prosperity of the U.S. and India isn’t a zero-sum game; it’s deeply interconnected,” Adhvaryu emphasized.
From Suitcases to Ideas: Personal Perspective on Economic Transformation
Adhvaryu brings personal experience to his research on U.S.-India economic ties. Growing up in the United States during the 1980s when India’s economy was more closed, he recalls trips to India filled with suitcases of American goods for family members.
“Today, what connects the two countries isn’t what’s in our suitcases; it’s what’s in our minds. It’s ideas, research and shared innovation. That’s what makes this partnership so powerful,” he reflected.
This transformation from physical goods exchange to intellectual and innovation-based collaboration represents the fundamental shift in U.S.-India economic relations over the past four decades.
Research Implications for Global Economic Policy
Adhvaryu’s research demonstrates that prosperity in the United States and India rises together through collaboration in science, technology, and education. The benefits of international innovation partnerships extend beyond foreign markets to improve quality of life domestically.
“Collaboration in science, technology and education doesn’t just drive growth abroad — it makes life better here, too. The stronger our connections, the more resilient and innovative our economies become,” he concluded.
About the 21st Century India Center
The 21st Century India Center at UC San Diego’s School of Global Policy and Strategy conducts research on India’s economic development, U.S.-India relations, and the role of emerging economies in global prosperity. The center focuses on understanding how international partnerships drive innovation and economic growth in interconnected economies.
For more information about the research and the 21st Century India Center, visit the center’s website at UC San Diego.
