Tuesday, June 9, 2009

Barack Obama’s anti-outsourcing stance concerns India

American President, Barack Obama’s anti-outsourcing movement came as a big blow to the Indian IT Industry. Of the total foreign currency earned by the Indian IT sector, 60% ($64 billion) comes from outsourcing. At present, about 1,000 American companies have shifted their jobs in abroad. Barack Obama, in his first US Congress session on February 25, 2009, said that his government would give tax breaks to companies that would retain jobs in US and vice versa. This would badly hit the American companies that have outsourced jobs in abroad.

Kamal Nath, India’s Minister of Commerce and Industry, said that he will clarify this issue with Washington. Indian government will also discuss this anti-outsourcing movement in the World Trade Organization. Mr. Nath said that his government would make sure that America’s movement is compatible with WTO when they had been talking about bi-lateral trade and movements of goods, people and services. He also said that one has to see how the US companies are using India as a base for technological development. It can not shutdown instantly.

Moreover, the US companies that are receiving bail out money would not be able to hire employees through the H-1B visa which is another major blow to the thriving Indian IT industry. As per his election agenda, Obama started this outsourcing movement to retain jobs in USA. The US President has also set goals to creat 3.5 million jobs in the country.

Obama’s decision upset the heads IT companies in India. Kris Gopalakrishnan, CEO, Infosys, said that outsourcing increased the competitiveness of US companies and it created more jobs inside the country. Ashok Soota, CMD, MindTree, said that Obama’s speech was an extension of what he had said in his campaigns. Sujata Rakhra, Vice President, Marketing and Communication, APAC, Perot Systems said that businesses today are truly global than ever before and such protectionalist measures would not only restrict innovation but would also hamper the progress of globalization. Along with Indian IT companies, this new decision also upset many US companies that are saying that such a move would hurt US.

Related articles:

IBN Live

The Economic Times

(This entry was first published in February 2009. Because of a technical problem, the entry had to be deleted and I am reposting again now.)


  1. My suggestion to the US congressmen and Senators that if you truthfully love your countrymen, please stop this outsourcing. I know business, revenue, profits are private rights but Government and the Guardians of the Society can protect using 'notwithstanding' clause of Federalism as the general rule is the Country's interest first. The irony is that Indian IT companies like Infosys, TCS, Wipro etc exploit their employees by compelling to work for 15 to 18 hours a day day-in and day-out, months by months, year after year but being paid for 8 hours. This way, the cost of outsourcing becomes very very attractive to US businesses at the inhuman exploitation of the employees. So, if the Obama administration and Senators and Congressmen can stop exploitation of human being by suitable legislation, the honey of outsourcing will evaporate and jobs will come back to the Americans. Canadians also follow this same process to protect their people. I know this as I was subjected to this kind of inhuman exploitation by an Indian IT company and if investigation in carried on, unless they delete all records, then the method of exploitation will be palpably evidenced.

  2. well said sir..couldn't agree with you more..

    please also read this post in the link below on the specifics of outsourcing companies are doing excessive outsourcing and exploitation and what's the remedy.