The Hindu Business Line : `Bush or Kerry, outsourcing is here to stay'

EVEN as incumbent Mr George Bush stays short of a clear verdict in the US presidential elections, the Indian IT and BPO industry is of the broader consensus that outsourcing is here to stay.

However, a section of the industry feels that outsourcing order flows would accelerate post-elections.

"We believe that the outcome of the US elections will not have any impact on business," said Mr Nandan Nilekani, President, CEO and Managing Director of Infosys Technologies.

"The US is a strong proponent of free trade and corporate America is not swayed by political outcomes.

"We are convinced that offshoring is a mega trend that will continue," he added.

Mr Sudip Banerjee, President, Enterprise Solutions, Wipro Technologies, said "Regardless of who wins, there will be no impact."

A victory to Mr Bush would mean continuation of existing policies, which are beneficial to Indian vendors, he said.

However, Mr Banerjee declined to comment on the market expectations that a mandate for Mr Bush would see a surge in order flows to Indian vendors, stating "it's better to wait and watch and see how things take shape."

The Indian IT industry, which earns 70 per cent of its revenues from the US, expects a surge in order flows post-elections with several mega deals in the offing.

An increased rhetoric against outsourcing in the run-up to the polls had made US firms to hold back their plans to move jobs overseas.

"A win for Mr Bush will bring down the uncertainty," said Mr Subash Menon, CEO, Subex Systems.

Mr Phaneesh Murthy, CEO, iGATE Global Solutions, said work would continue as normal for mainstream services such as IT. A large number of IT and BPO deals are being talked about and signed now and that is not likely to be impacted as most of the Fortune companies have already seen the benefit and more and more companies are spending their budget on work being done in India, he said.

"If at all, there could be some new legislations that may tax certain types of work done and impact newer BPO-style back-office work, in the event of Mr John Kerry winning the elections.

Ultimately, businesses do what is best for them and we are confident that our business model helps businesses get more competitive," Mr Murthy added.

"A clear mandate to Mr Bush would mean that there will be a faster movement of order flows," said Mr S. Nagarajan, founder and COO of 24/7 Customer, a provider of BPO services.

"We expect the momentum in client visits to pick up soon," he added.

`Changes in visa policy unlikely'

THE US visa policy is unlikely to see any change if President Bush returns to the White House, industry officials said.

"Off-shoring would definitely prosper, but in-shoring would diminish," said Mr S. Nagarajan, founder and COO of 24/7 Customer. `In-shoring' refers to bringing in more skilled foreign workers by companies to the US.

"A victory for Republicans would mean that H-1B visas could be controlled at the current levels for a longer time," Mr Nagarajan said. Traditionally, the Republicans are seen in favour of off-shoring jobs and are against migrant skilled workers taking the US jobs. However, the Democrats, who seemed to be comfortable with skilled immigrants taking the jobs in the US, are against sending jobs overseas, Mr Nagarajan said. The Republican Party's stand was reflected in the Bush administration's policy measures, which saw the H-1B visa permits gradually reducing over the years, Mr Nagarajan said. The Bush administration had capped the H-1B visa limit to 65,000 for current year, which got exhausted within a day.

Mr Banerjee declined to comment on the possible impact over visa policy, but said Wipro has adequate visas for the next 3-4 quarters.

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