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Polls in US could put pressure on outsourcing: Nasscom

Nasscom said US legislators will face increasing voter pressure to cut back on outsourcing in the run-up to US national elections this year.

business Updated: Jan 16, 2004 18:49 IST

National Association of Software and Service Companies (Nasscom) president Kiran Karnik said on Friday that he was concerned US legislators will face increasing voter pressure to cut back on outsourcing in the run-up to US national elections this year.

"We are not worried, but we are concerned. (So far) there has not been a direct impact on business," said Karnik.

"There will be populist pressure to put forward some bills. These bills are important as they are clearly putting forward the concerns of political constituents (about their jobs)," he added.

He said he hoped that as the US economy picks up, acceptance of outsourcing among Americans would grow, especially in light of figures indicating that the US economy can benefit from shifting work overseas.

Outsourcing work from the United States and Europe to India can cut costs for global firms by up to 40 per cent, figures show.

"Hopefully, with the improvement in the US economy, the concerns all around will decrease as we expect that the job situation will pick up," he said.

Increasing numbers of foreign firms are moving software development, call centre, accounting and other jobs to India and other Asian nations to take advantage of their low-cost, highly skilled workforces, provoking alarm among employees in the West.

Karnik said that he expected IT industry export sales to rise by around 26 per cent to $12 billion in the financial year ending March 31.

First Published: Jan 16, 2004 17:45 IST