Indian outsourcing industry jittery after Obama win
By
John Ribeiro
,
IDG News Service
, 11/05/2008
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India's outsourcing industry is in private a little jittery after Sen. Barack Obama's victory in the U.S. presidential election. But there is the expectation in industry circles that in the end economic pragmatism will
prevail.
Obama said in his acceptance speech of the Democratic Party's presidential nomination that as president, he would stop giving
tax breaks to companies that ship jobs overseas, and start giving them to companies that create jobs in the United States.
(Watch a slideshow on eight ways how technology shaped the 2008 election.)
That could spell trouble for India's outsourcers, which get most of their revenue from the United States.
There are fears that in the current protectionist mood, companies in the United States, already battling an economic crisis,
will cut costs by reducing discretionary work sent offshore to countries such as India, according to an analyst who declined
to be quoted.
Congratulating Obama on his victory, the National Association of Software and Service Companies (Nasscom) said on Wednesday
that it supports expanding the H-1B visa program to allow more skilled workers from abroad. As it helps meet skills shortages in the United States, the H-1B visa program
can help U.S. companies lead the way on innovation and contribute additional jobs and economic growth in the country, a Nasscom
spokeswoman said.
The H-1B visa program has previously been criticized by some senators who said it was being used to displace qualified U.S.
workers with foreign employees. But many technology companies in the United States say the program provides skilled workers
that they can't find easily in the United States.
The uncertainty in India about the impact of Obama's presidency on Indian outsourcing was also reflected by the country's
finance minister P. Chidambaram, referring to Obama's comments on outsourcing. "A comment here or a comment there should not
bother us," Chidambaram told reporters on Wednesday. "Once Obama is in office, he will realize that it is an interconnected
world, and countries have to work together."
Some analysts hold that the fears may be exaggerated as an U.S. economic recovery will depend largely on cutting costs, which offshore outsourcing offers.
Obama's comments about bringing jobs to the United States were primarily in the context of manufacturing jobs, according to
Gartner. "In a specialized field like IT, it is not just a matter of 'choosing' to outsource overseas or not, but the issue
of skills availability locally," said Partha Iyengar, a vice president at Gartner.
There is usually a lot of rhetoric in the run-up to an election, said Siddharth Pai, a partner at sourcing consultancy firm
Technology Partners International. Before pushing through any protectionist legislation, any president will have to seriously
consider that outsourcing and offshoring offer direct cost benefits to U.S. companies, and will keep the country competitive,
he added.
The IDG News Service is a Network World affiliate.
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Comments (10)
H-1B Visa ProgramBy Anonymous on November 6, 2008, 4:19 amIt is time to end the H-1B Visa program here in the U.S.A., the skills are here in the US. The problem is with the companies who do not want to pay us. They would...
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I am NOT a protectionistBy vbierschwale on November 6, 2008, 1:30 pmI am 100% in favor of free trade where we can sell our goods to other nations and where we can buy their goods for our use. This is good for our economy and their...
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Indian OutsourcingBy Anonymous on November 6, 2008, 1:39 pmAs long as companies, such as the one I work for, continue to build large "learning centers" for workers in India and Malaysia to ensure that their "cheap labor"...
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what shortage of skilled workersBy Anonymous on November 6, 2008, 3:18 pmOnly the manufactured numbers these companies use to justify moving jobs offshore or bringing in cheaper workers so they can cut costs. I have 20+ years of IT experience...
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WE HAVE THE BEST COLLEGES HERE IN THE OLD U.S.A.By Anonymous on November 7, 2008, 4:48 amThese companies are just full of it!!! We have the best colleges and people to do anything that we put are minds to and they have the balls to say they need to go...
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Outsourcing debateBy Anonymous on November 9, 2008, 2:10 amPerhaps, this is a boon in disguise. Life back in India was becoming extremely difficult for everyone (including the ones doing backbreaking hardwork), except the...
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