US move to withdraw tax breaks a matter of concern: FICCI
The Federation of Indian Chamber of Commerce and Industry expressed concern over US Prez Barack Obama's statement on ending tax breaks for outsourcing companies, saying "protectionist measures could deteriorate the situation further".business Updated: Feb 25, 2009 21:22 IST
The Federation of Indian Chamber of Commerce and Industry on Wednesday expressed concern over US President Barack Obama's statement on ending tax breaks for outsourcing companies, saying "protectionist measures could deteriorate the situation further".
"Coming at a time when the global economy is going through a phase of slowdown and when countries need to work collectively, protectionist measures of any kind could deteriorate the situation further," FICCI said in a statement.
Obama, while addressing US Congress, said: "We will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas."
However, citing a study by the US Chamber of Commerce, FICCI said that it were American companies that gained maximum from outsourcing.
On the likely impact the US move could have on Indian companies, FICCI said: "We will have to wait and see how the rules are framed and implemented."
"If significant tax incentives were taken away from US companies that outsource work to more cost-effective locations, then Indian service providers would certainly feel the impact, as less work would be contracted out," added the industry lobby.
First Published: Feb 25, 2009 21:20 IST