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Indian IT honchos shrug off Obama threat to outsourcing
Published on Thu, Sep 04, 2008 at 10:10, Updated on Thu, Sep 04, 2008 at 11:44 in Business section
Tags: Barack Obama, Outsourcing , Bangalore
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Bangalore: The Indian IT industry remains unfazed by the threat to outsourcing sounded by US Democratic presidential nominee Barack Obama.
"Companies that ship jobs overseas will not get tax breaks," he said in his nomination address at the Denver democratic national convention last week.
Having survived the campaign of former US Democratic presidential candidate John Kerry four years ago on jobs being "Bangalored" because of outsourcing, head honchos of leading IT firms here say: "Don't read much into what Obama said in a poll campaign. He didn't say either that firms creating jobs in America will get tax breaks.
"The reference may have more to do with the loss or lack of jobs in sectors like manufacturing than IT services," Som Mittal, chairman of Indian software services' trade body Nasscom, said.
Though the US market remains the best bet for the Indian IT services sector, contributing over 60 per cent of the total revenue for bellwethers such as TCS, Infosys, Wipro and Satyam, Obama's passing reference against outsourcing does not rattle them as it did in the past due to changing market/industry dynamics and advent of globalisation.
"Democratic governments in the past were in support of free trade as the US has been all along. We don't think that practice will go when a new administration takes over early next year. The stakeholders are well aware of the advantages of outsourcing, especially in the service industry," Mittal observed.
Echoing Mittal, Infosys director and human resources department head T V Mohandas Pai said outsourcing was inevitable in a globalised world, as there was no going back considering its benefits for companies, employees and the US economy at large.
"Globalisation and outsourcing go hand-in-hand. If the world is to be a single market for delivery of goods and services, outsourcing has to be part of it to compete and sustain. Increasingly, trans-nationals are driving global growth and outsourcing is inevitable," Pai said.
Admitting job losses was a sensitive issue and a worrying factor during recession, Pai said the remedy in such a bleak scenario was to outsource the work or service where talent and cost arbitrage would enable US firms to tighten belts and save as much to protect or create more jobs.
"On the contrary, by outsourcing IT services or back office operations from countries like India, US companies not only cut costs, but also improve efficiency, productivity and competitiveness by focusing on their core competencies," Pai asserted.
Without countering Obama's "off-the-cuff" remark, Mittal said in the IT services domains, American corporations across verticals were well aware that outsourcing enhanced their competitiveness, increased efficiency and created more jobs to sustain business and drive growth.
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URBANEYE
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Its actually very tricky situation. You simply cannot cut off outsourcing. Probably you can reduce it and create more local
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Dot com got busted in 2000 ,and from year 2000 onwards even tough US outsoured all IT work to India
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