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Anti-outsourcing bill blocked in US Senate

A bill moved in the Senate by the Democrats to bring jobs back to America by granting payroll tax breaks to participating companies was defeated on Tuesday by 53 to 45 votes.

world Updated: Sep 30, 2010 01:22 IST
Yashwant Raj

This Round goes to India, courtesy the Republican party.

A bill moved in the Senate by the Democrats to bring jobs back to America by granting payroll tax breaks to participating companies was defeated on Tuesday by 53 to 45 votes.

A US squeeze on outsourcing had become a major worry for India as it was feared the state of Ohio, which banned outsourcing in August of government funded projects, might trigger a chain reaction.

What was even more worrying for India was the stand taken by President Barack Obama and his Democratic party on the issue: he said he was completely opposed to shipping job abroad.

The measure — A bill to amend the Internal Revenue Code of 1986 to create American jobs and to prevent the offshoring of such jobs overseas — was put to vote on Tuesday and defeated in a a vote predictably along party lines.

The Business Roundtable, a pressure group comprising the US’s top CEOs, who account for $ 6 trillion in revenues and employ 12 million people, wrote a letter to the senate arguing for the move to be dropped.

Indian minister and officials has opposed ban on outsourcing for entirely different reasons — restrictive trade practice (in theory), but actually hurting many Indian businesses with huge stakes in the outsourcing market.

Commerce minister Anand Sharma forcefully argued for it in his talks here with the US trade representative, and foreign secretary Nirupama Rao raised it with her interlocutors while discussing the coming presidential visit.

Thumbs up from India Inc.

India Inc has given a thumbs-up to the US Senate’s decision. “FICCI has been emphasizing that protectionist measures were not in the long-term interest of anyone,” FICCI secretary general Amit Mitra said.

He said taking measures that force companies to restrict economic activities in one region and not in the other would be a retrograde step.

Calling it a ‘welcome development’, Chairman, CII National Committee on IT & ITeS, Ganesh Natrajan said the debate that accompanied the rejection of the bill, stresses one important point that local job creation would happen once companies expand globally.

HTC, New Delhi