IT Inc on Obama's outsourcing plan

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Seems the current recession is turning US ‘inwards’. In the country, which taught the world lessons of `open economy', the demand for protectionism is getting louder. The pains of turbulent economy is making many Americans target outsourcing.

Giving his first speech to a joint session of the US Congress, the county's president Barack Obama said, “We will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas.”

If Obama follows through with the announcement in the budget, the move may hurt India's BPO sector as without the tax breaks, US companies may find it less attractive to outsource jobs to India.

Obama's conservative stance on outsourcing poses a threat to the growing Indian IT industry already reeling under the effects of a troubled global economy.

Here's over to how Indian IT is reacting to Obama's outsourcing plan.

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Infosys


Reacting cautiously to US President Barack Obama's remarks on outsourcing, Kris Gopalakrishnan, CEO of Infosys Technologies, said outsourcing had enhanced the competitiveness of US corporations and had created more jobs within the US economy.

"The US is a very open economy and a strong proponent of free trade globally. We are confident the US will not take any measure, which might hurt its global competitiveness," Infosys said.

"We need to wait for more details to understand Obama's statement," Infosys added. TV Mohandas Pai, board member and director, human resources at Infosys Technologies, said IT outsourcing was the least of Obama's worries. "Over 60,000 US jobs are being lost every month and reviving the manufacturing sector there is the target," he said.

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Wipro


Wipro said in the current economic environment, it was imperative for global corporations to collaborate on technology and innovation. Wipro executive director and chief financial officer Suresh Senapaty said that policies of protectionism would only hinder the revival of the world economy.

He added, "We feel that in the current economic environment it is imperative for global corporations to collaborate on technology and innovation."

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Satyam


According to Kiran Karnik, former Nasscom president and current chairman of Satyam Computer Services, which is reeling under Rs 7,136-crore financial fraud, the move would have little impact on it.

“Our exposure is not much when compared to that of our peers. We don't want to comment much beyond this,” T Hari, Head of Marketing and Communications at Satyam, said.

Karnik said that offshoring will continue because of operational efficiencies and not just the cost advantages.

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MindTree


Echoing similar sentiments, MindTree, CMD, Ashok Soota said, "His speech was an extension of what he had spoken earlier in his campaigns. The basic economics and logistics of outsourcing have not changed, and therefore it will not impact India adversely.''