Indian outsourcing industry jittery after Obama win

Indian outsourcers a little worried about Barack Obama's vow to keep jobs in the U.S.

India's outsourcing industry is in private a little jittery after Senator 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 U.S.

That could spell trouble for India's outsourcers, which get most of their revenue from the U.S.

There are fears that in the current protectionist mood, companies in the U.S., already battling an economic crisis, will cut costs by reducing discretionary work sent offshore to countries like 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 U.S., 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 come in for criticism from some senators who said it was being used to displace qualified U.S. workers with foreign employees. But many technology companies in the U.S. say the program provides skilled workers that they can't find easily in the U.S.

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 U.S. 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.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags outsourcing

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?