Cutback on outsourcing will only hit US: India Inc
SOURCE: Times of India
DATE: Feb 26th, 2009
Mohit Soapbox:
I tend to agree with the statement NASSCOM has made that is India Inc reading too much between the lines and jumping on conclusions which may or may not be correct. President Obama has a tough task ahead of him and he is looking at all possible levers to get the US economy stabilized and to get the negative sentiment out of the market. It is not an easy thing to do/ Creation of jobs in the US is a key component of the master plan laid out by the Obama government and I believe that the government will do it’s best to create these jobs. Will that result in rise of protectionism maybe but it is critical that the US economy stabilizes for rest of the world to move forward too.
ARTICLE
India Inc has expressed concern over US President Barack Obama’s plans to clamp down on the outsourcing industry. Such a legislationwill clearly make outsourcing unattractive to US companies, which is bad news for the Indian tech sector.
Reiterating one of his election campaign agenda, in his recent speech Obama made it clear that there would not be any tax benefits for American companies that outsource jobs overseas. The US President also said his stimulus package would create/save 3.5 million jobs in the country.
The domestic industry in general said such a move will only hurt the US as outsourcing makes a lot of economic and logical sense to the country.
Reacting to Obama’s statement, Kris Gopalakrishnan, CEO of Infosys Technologies, said, “Outsourcing has enhanced the competitiveness of US corporations and has created more jobs within the US economy. The US is an open economy and a strong proponent of free trade globally. We are confident that the US will not take any measures which might hurt its own global competitiveness.”
Echoing similar sentiments, MindTree, CMD, Ashok Soota said, “His speech was an extension of what he had spoken earlier in his campaigns. The basic economics and logics of outsourcing have not changed, and therefore it will not impact India adversely.”
Again, CIOs are under tremendous pressure to find best cost structures to support their global trade. “Businesses today are truly global than ever before and such protectionalist measures not only restrict innovation but also hamper the progress of globalisation. Global markets are a two-way street to sell and buy products and services,” said Sujata Rakhra, VP (marketing & communication) APAC, Perot Systems.
FICCI past president Rajeev Chandrashekar said such a move will hurt companies in the US and India alike. “This poses yet another challenge for Indian IT and software companies that are growing in the US. It will also punish American companies, not just Indian firms,” said Chandrashekar.
However, the apex body Nasscom expressed a mild reaction to Obama’s statement. “All efforts of Obama are currently focused on the revival of the US economy. A turnaround in US economy is good news for India. We need not read much into other details of Obama’s speech,” said Som Mittal, president, Nasscom.
Wipro CFO Suresh Senapaty said, “We endorse Nasscom’s view on this and feel that in the current economic environment it is imperative for global corporations to collaborate on technology and innovation. Policies of protectionism will only hinder the revival of the world economy.”
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