US President Barack Obama on Wednesday offered tax incentives to American companies bringing jobs back home, a move that will worry outsourcing hotspots India and China.
“My message to business leaders is simple: Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed,” Obama said in the state of the union speech, his final before seeking re-election this year.
“Companies get tax breaks for moving jobs and profits overseas. Companies that choose to stay in America get hit with one of the highest tax rates in the world. It makes no sense, and everyone knows it. So let’s change it,” he said.
Obama returns to the outsourcing theme time and again as joblessness in the US hovers around 8%.
It helps him connect with an angry and frustrated electorate.
The issue also gets immediate attention in India and China, the favoured outsourcing destinations for US services and manufacturing respectively. Any anti-outsourcing talk in the US makes the Indian IT industry nervous.
Nasscom, the apex body of the Indian IT industry, in a statement said: “The Indian IT industry consists of world class companies that are running operations and making investments all over the world, including the US, and contributing substantially to build innovation and competitiveness in the American economy.”