A supporter of President Barack Obama holds a flag and sports a T-shirt which has a portrait of Obama and a phrase that reads 'Bangalore has hope' during a screening of US elections coverage organized at a restaurant over breakfast in Bangalore. AP Photo/Aijaz Rahi
Over the last several months and in the run-up to his presidential campaign, Obama had advocated an end to tax breaks for American firms that outsource work to other countries. “Why are jobs being moved from Buffalo to Bangalore?” he often asked rhetorically in his public speeches that drew loud cheers from the audience. This was also the time when unemployment rate in the US hovered around 9%. Unemployment rates in the US have only eased marginally since then.
The big question now before India’s $100 billion ( Rs. 540,000-crore) IT-BPO industry is whether his speeches were election rhetoric or spell ground-level action that would lead to tough times for Indian firms.
“Not the best news for India or Indian outsourcing industry. We need to understand how much of the election rhetoric continues into 2013 and that will determine the full implications to us,” Phaneesh Murthy, chief executive officer of software firm iGATE said candidly.
Others, less candid, couched their words in guarded optimism.
Industry association Nasscom, signalling hope, explained that over the last five years Indian IT sector had created around 280,000 jobs in the US and paid close to $15 billion in taxes. “Outsourcing creates jobs all across and this perception is emerging,” said Ameet Nivsarkar, vice- president, Nasscom.
Pramod Bhasin, vice chairman of Genpact--a BPO major---expressed hope that Obama remained committed to free trade.
The US is a crucial market for Indian IT players as it accounts for around 70% of their export revenues Vineet Nayar, vice chairman of HCL Technologies spotted more opportunities in America’s growth plans for companies like his.
“The Indian IT Industry will particularly stand to gain from this resurgence as our innovation driven proposition is a perfect fit for American corporations...,” he said.
N. Chandrasekaran, CEO of India’s biggest software firm, Tata Consultancy Services, echoing the thought, said Indian firms will have the opportunity to play a “significant role to partner with US companies” on the growth curve.
S Gopalakrishnan, executive co-chairman of Infosys said there was a shortage of skilled people (in the US) and with economics high on Obama’s agenda Indian IT players are set to to gain in due course.