IT Outsourcing India

NEW DELHI: India on Thursday indicated that the US move against outsourcing may be contested in the World Trade Organisation, stating New Delhi will take up the issue with Washington.

"We have to ensure what they (US) are doing is WTO compatible when we are talking about trade, movement of goods, movement of people and movement of services," Commerce and Industry Minister Kamal Nath said here.

"Yes, of course," he said when asked if India will take up the issue of outsourcing with the US administration.

In his first address to the joint session of the US Congress on Wednesday, Obama stated his administration would end tax breaks for corporations that ship the US jobs overseas.

Nath said, "One has to see how the US companies using India as a base for technological development respond to their own government." Outsourcing of technology development by large companies cannot be switched on and off, he added.

About 1,000 American firms, which have moved their jobs abroad, are expected to be affected by the proposed Obama move against outsourcing.

Among the major US companies, which have shipped jobs to other countries like India include General Electric, Microsoft, Hewlett-Packard, Motorola, Pepsico and Proctor & Gamble.

Source : http://economictimes.indiatimes.com/

New Delhi: While US President Barack Obama’s statements on curbing tax breaks for outsourcing companies in the US set alarm bells ringing in the Indian IT sector, industry experts believe there is no reason to panic, yet. Obama’s statement come at a time when a National Association of Software and Service Companies (Nasscom) delegation is in the US, as part of its annual routine to promote services offered by the Indian IT sector.

Speaking earlier to news agencies from the US, Nasscom president Som Mittal articulated the importance of globalisation to the US economy. “American companies generate more than 50 per cent of their business outside the US. To be globally competitive, they also depend on globally shared services,” he said. Mittal is part of the 3-member delegation also comprising Nasscom chairman Ganesh Natarajan and vice-president Ameet Nivsarkar.

Analysts said Obama’s comments were primarily directed towards manufacturing companies that outsource jobs. “The impact will be limited on the IT industry. Obama’s statements refer primarily to outsourcing being carried out by manufacturing companies. US outsources jobs and services not just to India but also to other nations like China,” said KPMG outsourcing advisory head Vishal Thakker. These tax breaks are applicable to companies that repatriate their profits from foreign shores.

Source : http://www.indianexpress.com/