Election To Impact Indian Outsourcing?

    November 5, 2008
    Chris Crum

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.