Obama targets outsourcing,wants US jobs

The countrys $50-billion software services export industry once again came in the line of fire with US president Barrack Obama reiterating his proposal to slash the tax breaks for companies that ship our jobs overseas and instead give those tax breaks to companies that create jobs in the USA. Though the Senate is yet to pass the jobs Bill that includes some of these steps,Obamas rhetoric once again sent shivers down the industrys spines,as the US market accounts for close to 60 per cent of its revenues. A report by IT consultancy firm Forrester Research estimates that 3.3 million American jobs will be lost to outsourcing in 15 years ending 2015.

Obamas statement,which was part of his State of the Union address,while meeting with thunderous applause on Capitol Hill may not impact the Indian outsourcing industry immediately. However,as a reiteration of his administrations policy direction,it could spur the domestic IT & ITeS sectors ongoing efforts to broaden the geographic horizon of its business. IT industry body Nasscom put on a brave face,insisting that the Obama proposal would not impact the industry as the proposals appear to be aimed at addressing the tax rate differentials that exist across the world and if implemented,this would impact American headquartered companies with overseas operations.

There was mixed reaction from the markets. While shares of the countrys largest IT exporter by sales,Tata Consultancy Services,fell 0.42 per cent to close at Rs 740.40 on the BSE in an otherwise flat market; shares of third-largest firm Wipro rose 2.82 per cent at Rs 672.9. Shares of Infosys fell marginally by 0.16 per cent to Rs 2,494.35.