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O-negative for Indian IT industry

world Updated: Sep 10, 2010 23:07 IST
Yashwant Raj

The voice at the other end says he is Mark. But he isn't. And if an increasing number of US politicians can have their way, Mark's job would actually revert to the real Mark somewhere in America.

Every time President Barack Obama repeats his opposition to offshoring work, he gets a bonus round of applause with a few “yeahs” thrown in.

It's an act he plays from the heart, the same way each time, never mind the uproar in India against US protectionism.

Actually, it's not an act at all. A tax concession on US companies' earnings abroad stands withdrawn and he has not shown a change of mind or heart on the issue yet.

"For years, our tax code has given billions of dollars in tax breaks that encourage companies to create jobs and profits in other countries," Obama said on Wednesday. "I want to change that."

Sharing the stage was Ohio governor Ted Strickland, who only a month ago banned offshoring of projects funded by government money.

If there are hopes of either gentleman changing his mind, here is what Strickland's office told Hindustan Times, on Wednesday: "The governor's executive order (issued in 2008) made it very clear that Ohio's policy has been — and must continue to be — that public funds should not be spent on services provided offshore."

But one company violated that order. The governor's office said the official responsible for policing the violation had been fired and the governor had redoubled his commitment to make sure public funds are not sent offshore at the cost of Ohio or US workers if they can do the job.

Both Obama and Strickland are Democrats whose supporters come from the section of people worst hit by offshored jobs. "They cannot afford to look soft on the issue," said a political observer.

Unemployment is around 9.6 per cent countrywide and around 10 per cent in Ohio. They cannot be seen to be sending jobs abroad.

Republicans, with the traditional backing of the big businesses, stand in contrast.

They support offshoring as do big businesses, as they don't have to worry about laid-off workers. "The wrong approach is to implement measures that restrict trade, invite retaliation or violate the United States Constitution or our foreign trade agreements," California's Republican governor Arnold Schwarzenegger said in 2004 when he vetoed an anti-offshoring bill.

An industry official admitted to difficult times. "We are for free trade but at times such as this politicians will look at their constituency," he said.

India is unlikely to get anything from Obama during his November tour, said someone close to the preparations for the visit. Besides, he would be there immediately after the mid-term elections, in which the Democrats are expected to perform very badly. "Obama will not be in a mood to concede anything then," he said.