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India IT hopes for easing of Obama’s anti-outsourcing stance

08 November, 2012

India’s outsourcing chiefs crossed their fingers that Barack Obama would take a less hawkish stance on the industry during his second term, as they cheered his re-election as a possible boost to the US economy.

Obama sharpened his rhetoric against industries that move jobs out of America during his re-election campaign, and his administration has been criticised by outsourcing industry bodies in India for tightening visa rules.

“Not the best news for India or the IT outsourcing industry,” Phaneesh Murthy, chief executive officer of iGate Corp, said in response to Obama’s victory.

“We need to understand how much of the election rhetoric continues into 2013 and that will determine the full implications to us,” Murthy said in a statement.

India’s trade minister had criticised Obama’s administration for a hike in visa charges for companies that have the majority of their employees overseas as “highly discriminatory” and detrimental to the profitability of Indian IT companies.

“I am hopeful … there will be more pragmatic approaches to some of the problems,” Kris Gopalakrishnan, executive co-chairman of Infosys Ltd (INFY.NS) said on Wednesday at the World Economic Forum on the outskirts of Delhi.

“I am hopeful that the US government will do the right thing.”

India’s $100 billion IT services sector has seen a sharp slowdown in growth in recent quarters as Western clients hold back on spending. Europe and the United States account for around three-quarters of the industry’s revenues.

“I think that there will be a lot of economic activity,” N. Chandrasekaran, chief executive officer of Tata Consultancy Services (TCS.NS), the industry leader, said in response to Obama’s re-election. “That translates into significant opportunities for the technology sector.”

HCL Technologies, India’s fourth-largest software services provider, said in a statement that it hoped Obama’s second term would “uplift the business sentiment and lead economic resurgence in America”.

With unemployment a crunch issue in the election, President Obama stepped up his criticism of US firms ‘exporting’ jobs early on in his campaign, seeking to tax them more and use that money to help those companies that keep jobs at home.

Adi Godrej, president of trade lobby group the Confederation of Indian Industry, described that stance as “election rhetoric”.

“Every time there’s a US election, these issues are raised,” he told Reuters.

But some Indian business leaders said Obama’s stance on outsourcing was a worrying trade issue.

“I would prefer Romney and the Republicans to Obama and the Democrats on trade policies, outsourcing and economic matters,” said Rahul Bajaj, chairman of the Bajaj Group industrial conglomerate. “Democrats and Obama … think you should not outsource more. That is bad. There Romney would have been better.”


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India IT hopes for easing of Obama’s anti-outsourcing stance

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