The Hindu Business Line : `Democrats' success will not have big impact here'

Impact assessment
Business in US is independent of who's in power.
SMEs in services sector could get a boost.
H1B visas will be hot-button issue again.

Bangalore, Nov. 9

The Indian IT & BPO industry is unruffled over the success of the Democrats in the run-up to the battle for the White House.

"The turnover of the US House and Senate to Democrats in the recent elections brings the future of globalisation front and centre. The current administration will remain in power for the next two years, so bipartisan trade agreements will become key to any progress," said Ms Jessica MacKenzie, Director, Tholons, an advisory and management firm.

"However, this election should not have an overwhelming impact overall. Unlike the sweeping changes we saw in the 90's, this change of power will be marked by smaller, more incremental changes. The momentum gained in services globalisation will remain strong," she added.

"Business in the US goes independent of who's in power. The recent developments are not really a cause of concern," said Mr Siddharth Pai, partner of TPI, an advisory firm.

The run-up to previous elections in 2004 did see a rise in anti-outsourcing rhetoric and the Democrats did bring about certain legislation to prevent outsourcing of federal work. The rising rhetoric last time was mainly a fall-out of the worsening employment situation then, industry sources said.

"Even if there is rhetoric, it won't have any impact on the market this time as offshoring and outsourcing, which was a new phenomenon few years ago, is now accepted part of package," Mr Pai said.

Officials of IT firms and industry bodies said the outsourcing market has become more mature now and the external influences are unlikely to have any significant impact. Moreover, India has clearly established itself as a major offshore destination. "Cost benefits gain precedence over political overtures and outsourcing will continue," they added.

"Democrats recently opposed an increase to the number of H1 visas. We should expect that immigration quotas, especially when related to trade and industry, will again be a hot-button issue in the months to come," Ms MacKenzie added.

Mr Avinash Vashistha, managing partner of Tholons, felt that the small and medium businesses in the services sector could get a boost as Democrats typically are champions of SMEs. "To this end, SMEs especially should look forward new opportunities in areas where they have not seen much growth," he added.

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