Indian IT Industry may suffer from outsourcing ban in Ohio State

Barack Obama
Barack Obama

New Delhi, Sep 14 (Calcutta Tube) A move by the American Ohio state to ban outsourcing projects to emerging markets like India and the shrill political rhetoric in the US on the subject ahead of the November Congressional polls will have no impact on the ties between the two countries, president Barack obama‘s chief technology officer said here Tuesday.

‘In a democracy you will have voices that say things here and there. But you must look to the core. What is actually happening on the ground … and in that area there is nothing but growth,’ said Aneesh Chopra, the White House chief technology officer, when asked about the Ohio state’s bill to ban outsourcing of its IT projects and similar actions being mulled by others.

‘I am confident these issues will be resolved because good people will sit around the table and think them through,’ Chopra told reporters on the sidelines of a CII conference.

The Ohio state government’s action and President Obama‘s increasing pitch against outsourcing has created anxiety in Indian IT circles.

Obama last week said his administration will offer tax benefits only to firms that create jobs in the country, a move that may hit Indian IT firms in a big way.

The move was criticized by Commerce Minister Anand Sharma, among others, who termed the action as ‘regressive’ and warned that protectionist tendencies would deepen recession.

Chopra, who is leading a high-level technology delegation and met government functionaries including the Unique Identity Authority Chairman Nandan Nilekani, said Obama’s comments were being mis-read.

‘I don’t believe that it is a accurate reflection of the President’s comments,’ said Chopra.

‘Government investments in technology are modest in the scale of the overall economy. Maybe its an important thing to understand for everybody. The United States economy is very much market based, so whether a government chooses to do X or Y in its particular requirements, these are modest,’ he added.

According to India’s apex IT body, Nasscom, the move was influenced by the November elections to the US Congress and Ohio governorship drawing closer. Nasscom president Som Mittal said more such electoral rhetoric could be expected in the next few months.

Chopra, however, hoped that the whole outsourcing issue would be resolved in a quick and mutually beneficial manner.

‘Nobody is wrong, nobody is right. You sit down and think it through and each side needs to have their voice heard. Then you make progress. I am confident that this is the way it will be approached,’ said Chopra.

Sam Pitroda, chairman of the National Innovation Council, who was also present at the seminar on innovation exchange between India and the US, said: ‘The commerce minister and other functionaries know what to do. We have to support it.’

But Pitroda said too much was being made out of the whole outsourcing ban controversy.

‘You can’t be hung up on one order cancelled. I mean it hurts someone whose order got cancelled, but as a nation you got to look beyond. Our key challenge is to go up the value chain,’ said Pitroda, who is also advisor to the Prime Minister on public information infrastructure.

1 thought on “Indian IT Industry may suffer from outsourcing ban in Ohio State

  1. Obama will be visiting India in November and he will probably do one of two things: to appease India, he might make some kind of concession during his visit. Or, given the right rhetoric, he might dissuade Indian outsourcing companies who are threatening to bring the matter to the WTO.

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