Indian outsourcers highlight US job creation

A Nasscom team visiting the U.S. will highlight the direct and indirect jobs created by Indian outsourcers

Indian outsourcers employed 107,000 staff in the U.S. in the Indian fiscal year ended March 31, 2011, in addition to providing indirect employment to 175,000 people, according to a study to be released in the U.S. by the National Association of Software and Services Companies (Nasscom) on Wednesday.

The Nasscom study, which comes in the run-up to U.S. presidential election, appears to be aimed at deflecting criticism of offshoring in the U.S., which still had an unemployment rate of over 8.3 percent in February.

The number of U.S. citizens among the staff hired has gone up to about 30 percent from less than 10 percent four years ago, Nasscom president Som Mittal said in a telephone interview.

The numbers are still a small percentage of the about 2.5 million staff employed by the IT and business process outsourcing industry in India, which address both the domestic and export market.

But Mittal promises significant changes. Local hiring in the U.S. has more than doubled in the last five years, according to the study.

Not only are Indian companies creating jobs in the U.S. and investing in companies in the country, but they are also involved in training staff and other activities aimed at boosting the local workforce, Mittal said.

Infosys, India's second largest outsourcer, said on Monday that it teamed up with Wayne County Community College District in Detroit to offer training in software development.

But there have also been demands to keep jobs in the U.S. rather than send them to other countries.

The U.S. Call Center and Consumer Protection Act (HR 3596), introduced in the U.S. House of Representatives in December, aims to discourage call centers from setting up overseas operations. Mittal does not believe the legislation represents a trend, but reflects issues that may surface from time to time. Nasscom holds that outsourcing to India has helped U.S. industry stay competitive, and as a result helped retained jobs in the U.S.

Now Indian companies are expecting to play a more direct role in creating jobs in the country.

Between 2006 and 2011, Indian companies have been steadily adding jobs in the U.S., even as the economy shed jobs, Mittal said. The numbers of U.S. employees of Indian outsourcers is expected to grow this year as well, he added.

Indian outsourcers are hiring more staff in the U.S. to offer value-added services like consultancy to U.S. customers, to employ experts and domain expertise who work closely with customers, and also to provide services in the same time zone, Mittal said.

The U.S. accounts for over 60 percent of the revenue of Indian outsourcers.

In the U.S., Indian companies made 261 acquisitions between fiscal 2007 and the first quarter of fiscal 2011, investing more than US$5 billion. Indian companies have also paid out $15 billion toward taxes and Social Security contribution during fiscal 2006 to fiscal 2011, according to the study.

India has been slow to open a number of its industries, including the retail sector, to foreign investment, and this issue is likely to come up in discussions about outsourcing in the U.S. Mittal, however, holds that the Indian IT sector has been deregulated over the last two decades and Indian government and public sector buying constitutes a large market for U.S. IT equipment and services companies.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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