India's fourth-largest drug maker recently announced the acquisition of two US-based companies, InvaGen Pharmaceuticals and Exelan Pharmaceuticals, for $550 million.These are the latest in a long line of acquisitions of mostly small and medium-sized US companies by Indian pharmaceutical and technology companies.But is not these sectors that are the biggest Indian investors in the US. The Aditya Vikram Birla Group is the largest Indian investor in the US, with investments of almost $11 billion in that country. Then, Reliance Industries has invested about $7.7 billion and the Essar Group is setting up a $1.8 billion pellet plant in Minnesota in the US.Now, with India emerging as one of the few bright spots in a stagnant global economy, many more Indian companies are expected to go out and acquire companies and other assets across the world, including in the US. It is here that Prime Minister Narendra Modi's US visit in September could provide a fillip to such investments. While his prime focus will be on inviting US companies to invest in India, the reverse is also true.Indian companies have invested or are keen on buying assets in sectors such as natural resources, IT, pharmaceuticals, gems and jewellery, infrastructure, aerospace, defence equipment and diversified industrial products in the US.The share of the US in India's outward Foreign Direct Investment (FDI) pie stood at 7.8 per cent last year, up from 5.5 per cent in 2008- 09. These figures, taken from a 2014 EY report could be higher as several companies which engaged in M&A deals, did not declare the values of their transactions.Then, several Indian companies route their investments in the US through subsidiaries and special purpose vehicles registered in countries such as the UK, the Netherlands, Dubai, Singapore and Switzerland. Says Shashank Tripathi, Leader, Strategy&, PwC: “This visit is very critical. Indo-US bilateral relations are in great shape and there are strong people-to-people ties but there's still a lot of scope to improve the economic bonds between the two countries, especially at a time when Indian entrepreneurship is bubbling over.” He points to President Barack Obama's healthcare initiative, popularly called “Obamacare” as one key area where India with its world leading expertise in frugal solutions can help.“But Indian companies still face substantial market access issues in the US,” adds Sandip Samaddar, Additional Director & Head, Americas, Federation of Indian Chambers of Commerce & Industry (Ficci). It is in situations such as this that Indian acquisitions of US companies can help both countries. “Many Indian companies would like a beachhead in the US. In pharmaceuticals in particular, there is a very strong shift in the manufacturing of generics... a large proportion of generics available in the US are made in India and it may soon grow further. To the extent that Modi's visit can galvanise a stronger connect between the entrepreneurship ecosystems in the two countries, it can lead to tremendous benefits, especially for the Indian economy,” says Tripathi.According to an EY-Ficci report last year, several factors are driving increased Indian investments in the US. They include:Advanced technologies: The US has been driving innovation in software and IT services.Furthermore, it has been estimated that the US accounted for around 31.4 Per cent of total global R&D in 2013. Access to advanced techniques and technical innovation has been a strategic consideration for Indian companies seeking to strengthen their competitiveness and move up the value chain.Natural resources: There has been a surge in the demand for natural resources in India to support the country's ambitious infrastructure development plans. The US's vast natural resources make it an attractive destination for India. Several Indian companies have bought or are looking to purchase shale gas assets in the US. Indian enterprises also wish to learn the technique of extracting gas from shale formations and transfer to similar formations in India. Reliance Industries, which has large interests in the US shale gas industry, has aggregate investments of about $7.7 billion at the end of December 2014.Expanding existing markets: Growing competition has also led Indian companies to look at new markets, and one of the most convenient options is through strategic partnerships and alliances with overseas companies.Furthermore, this provides them access to distribution networks to market their products and gain access to emerging technologies.US as a hub to expand business in Americas: A solid economic recovery, attractive demographic profile and friendly government policies make the US an attractive destination to expand business in the Americas region.Moreover, the North American Free Trade Agreement provides US-based companies open access to North American markets, i.e., Canada and Mexico. Thus, Indian companies with a beachhead in the US can sell their products in these countries as well. “Most Indian companies are not in a position to acquire large US firms. Most of the smaller companies that Indian companies have purchased in the US had some key technologies or provided market access,” says PwC's Tripathi.Ficci's Samaddar adds these deals and future outbound investments to the US by Indian companies are not really dependent on prime ministerial visits.“But Modi's visit is important because it will lead to an acceptance that we are now big enough globally and Indian companies would want a beachhead in the US,” says Tripathi. Interestingly, the US is among the few developed countries with which India has a positive trade balance. According to figures from the US Census Bureau website, India had a trade surplus of more than $14 billion in the first seven months of the current calendar year. For the whole of 2014, the figure was almost $24 billion in India's favour.Experts said the coming years will see much larger outflow of FDI from India to the US as the former plays catch-up with the rest of the world in terms of technology and market access.