Election To Impact Indian Outsourcing?

By: Chris Crum - November 5, 2008

Reports have been surfacing since last night’s election that while overall, India seems to have embraced the election of Barack Obama as the President of the United States, there have been some worries among the country’s people due to Obama’s position on outsourcing.

"I say, let’s end tax cuts for companies that ship American jobs overseas, and give them to companies that create good jobs right here in Indiana, in the United States of America," Obama has been quoted as saying.

India makes a large amount of money from outsourcing jobs coming from the U.S. Niraj Sheth posting on Washington Wire at WSJ.com reports:

But amid general excitement over a change in leadership in the U.S. is more than a hint of hesitation. During the long campaign, Obama took a stance against outsourcing, raising worries among people in India’s flagship industry, which gets nearly 60% of its revenue from U.S. companies. On the road, and in debates, Obama repeated that if elected, he would discourage companies from “shipping jobs overseas” by taking away tax breaks…

But people in the outsourcing industry here still expressed concern over Obama’s earlier comments. The industry is holding its breath to see what Obama does once he’s in office, says Som Mittal, President of Nasscom, a tech industry group. “Unemployment has more to do with the manufacturing sector in the US. We shouldn’t mix up the issue of unemployment with tech.”

Indian Finance Minister P Chidambaram does not seem too worried. According to Business Standard, he said that Obama’s anti-outsourcing stand will not impact Indo-US economic relations. "I am very confident that US-India relations will only be stronger in the future. A comment here, a comment there about outsourcing should not bother us," says Chidambaram.

Gartner Vice President says, "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." Iyengar believes Obama was referring more to manufacturing jobs than IT.

Chris Crum

About the Author

Chris CrumChris Crum has been a part of the WebProNews team and the iEntry Network of B2B Publications since 2003. Follow Chris on Twitter, on StumbleUpon, on Pinterest and/or on Google: +Chris Crum.

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  • http://www.thelostagency.com David

    Just noticed this article, the context is that both Indian undergraduates and graduate students are eligible to receive free software from Microsoft. So now your outsourcing will be able to be done cheaper because you pay for the license to use the developed product and your developers get it for free. 

    Im thinking that this is a move to stop students taking up open-source free tools which they will master and then use in their professional careers. I think its the smartest idea Redmond has had in a while. 



    • Chris Crum

      That’s interesting. Thanks for sharing the link.

  • http://www.pioutsource.com/ PI Outsource

    How is anyone to know really? 

    I provide outsourcing services. American companies pay my American company to provide task based labor (BPO) in the Philippines.

    My Filipino company is a vendor to my American company, just another vendor which provides services. My USA company pays my Philippine  company for the services rendered. The Philippine company pays the workers.

    Unless you put a sign on your door "I outsource some of my business to foreigners", no one will ever know. India, or the Philippines, need not worry about Obama.




    • http://www.diamondonnet.com/ Diamonds

      So true, its impossible to know if the programs are outsourced or not.

  • Guest


    Says Som Mittal, President of Nasscom, a tech industry group. “Unemployment has more to do with the manufacturing sector in the US. We shouldn’t mix up the issue of unemployment with tech.”

    So thats what you think.  Tell that that to the multitudes of ‘ Joe the Programmers’  that are in the ‘unemployed’ ranks now.


    Smell the coffee and wake up!

  • Guest

    I am a owner of medium sized web marketing company.  I proudly outsource and will continue to do so.  Outsourcing has helped my business stay profitable.  My company would not exist without it.

    I really like how people ignore the fact that outsourcing actually HELPS THE AMERICAN ECONOMY.  Companies outsource to lower their expenses so which in turn allows them to offer lower prices to their end clientelle/consumers.

    If we exclusively hire local programmers/contractors who cost three to five times we will be left with 2 options.

    1.  Our expenses are greater than revenues.  We go bankrupt…EVERYBODY LOSES!

    2.  To cover our expenses we have to increase our fees to the end clients….increasing their expenses.  Our clients either fire us, increase their own service/product rates or go bankrupt themselves.

    All in all I am sick and tired of people who walk around with a sense of self pity and self entitlement.    In the age of advancing information technology and globalization companies will find means to lower their costs.  Its nothing personal, its business!

    So for all you "joe programmers" out there I suggest the following:

    1.  If you can’t beat them, join them.  Hire a indian programmer to do your job and you act as liason between them and your US client.

    2.  Develop something indian programmers can’t offer or duplicate

    3.  Get a different job

    Nobody is entitled to anything.  Deal with it!

  • Dean

     I’m not stating I understand every aspect of economics but isn’t the whole point to not outsourcing so that more money stays in the US? If you’re paying your Phillipino/Indian workers that money isn’t coming back to the US. Unless you’re sleazy and only giving them 1% of what you make in profit then your point is moot. You as the business owner are only a small fraction of the "paid people".

    We also need to block Western Union orders from going down south of the US or tax or fee them so heavily that our US money isn’t flowing so much that way too.

    If all "American workers" are giving all their money to other countries, how is that money supposed to cycle back into our economy?

    You don’t care, it’s all about you right? Bigger picture people.

    Americans are becoming the middle men so that nobody will be the owners and nobody will be the workers, thus we essentially do nothing but move things along and in the end are simply slack and greedy.

    If you can’t create a product or a service that doesn’t require you to hire somebody that lives in poverty and sleeps on a towel on the ground then you should reconsider. Use your brain and come up with something new. Then donate that money to charities that help the poor if you want to help them so much.

    Every company in the US now expects to be able to have a Web site, an intranet and all sorts of other high-end software and marketing collateral for business. When did we cross the line where just because a person works on a computer that work/time is so less appreciated than someone who builds your brick-and-mortar store/office?

    That 2nd Lexus your wife/husband wants isn’t as important as your neighbor feeding their kids.

    Be a good person. Be a proud American.

  • http://car2be.com/browse_by_make_model/Buick/ Used Buick Terraza

    But people in the outsourcing industry here still expressed concern over Obama