Barack Obama’s anti-outsourcing stance concerns India

Barack Obama’s anti-outsourcing stance concerns India
American President, Barack Obama’s anti-outsourcing movement came as a big blow to the Indian IT Industry. Of the total foreign currency earned by the Indian IT sector, 60% ($64 billion) comes from outsourcing. At present, about 1,000 American companies have shifted their jobs in abroad. Barack Obama, in his first US Congress session on February 25, 2009, said that his government would give tax breaks to companies that would retain jobs in US and vice versa. This would badly hit the American companies that have outsourced jobs in abroad.

Kamal Nath, India’s Minister of Commerce and Industry, said that he will clarify this issue with Washington. Indian government will also discuss this anti-outsourcing movement in the World Trade Organization. Mr. Nath said that his government would make sure that America’s movement is compatible with WTO when they had been talking about bi-lateral trade and movements of goods, people and services. He also said that one has to see how the US companies are using India as a base for technological development. It can not shutdown instantly.

Moreover, the US companies that are receiving bail out money would not be able to hire employees through the H-1B visa which is another major blow to the thriving Indian IT industry. As per his election agenda, Obama started this outsourcing movement to retain jobs in USA. The US President has also set goals to creat 3.5 million jobs in the country.

Obama’s decision upset the heads IT companies in India. Kris Gopalakrishnan, CEO, Infosys, said that outsourcing increased the competitiveness of US companies and it created more jobs inside the country. Ashok Soota, CMD, MindTree, said that Obama’s speech was an extension of what he had said in his campaigns. Sujata Rakhra, Vice President, Marketing and Communication, APAC, Perot Systems said that businesses today are truly global than ever before and such protectionalist measures would not only restrict innovation but would also hamper the progress of globalization.

Along with Indian IT companies, this new decision also upset many US companies that are saying that such a move would hurt US.