The Hindu Business Line : Industry hopes Obama will go by American business needs

Bangalore/Hyderabad, Nov. 5 Apprehensions of unfavourable policies on offshoring by the new Government in the US took a back seat as the Indian IT industry affirmed that offshoring is basically driven by business needs and the Government would not try to hurt American businesses.

Mr Partha Iyengar, Vice-President, Distinguished Analyst and Regional Research Director India, Gartner, said in a specialised field like IT, it is not just a matter of ‘choosing’ to outsource overseas or not, but the issue of skills availability locally.

“It is increasingly clear that in many areas, the US does not have sufficient skills to address all the needs of US enterprises,” he added.

Mr Iyengar said Mr Obama seems to be a realist who will do what is right for US competitiveness, as opposed to pursuing populist policies. “Therefore, once the election rhetoric dies down, I do not expect that this – trying to discourage offshore outsourcing - will be a strong issue that will be pursued by the Obama administration,” he added.

“My personal feeling is that things are not going to change in terms of offshoring,” said Mr Pankaj Agarwal, Group CEO and Managing Director, Mindteck. “Mr Obama is a smart guy and he will not do stuff that will hurt American business.”

International relationships could also influence the offshoring policy of the new Government. “Now India is a friend to America, and how many friends does America have? So he would not want to create problem for his friends. Russia is a problem, Iran is a problem and China has its own issues,” said Mr Agarwal.

Pre-election and post-election are two different ball games. “When you really get in to the real life, you start understanding what is really happening,” he added.

Pointing out that there were similar clamours in the last elections, Mr Laxmikant Venkatraman, Managing Director, Broadridge Financial Solutions, said the outsourcing industry had grown by over 30 per cent in the last four years. “To me the decisions (to give the jobs to outsourcing) are purely based on business principles. It all depends on delivering quality jobs at lesser costs. As long as we compete there, we will have no issue,” he said.

Mr Iyengar said there is widespread agreement that Obama’s comments about bringing jobs back to the US were primarily in the context of manufacturing jobs (the bigger challenge and problem for the US) and not about outsourcing specifically.

Various studies around actual job loss due to offshore outsourcing have shown that, in the overall context of the size of the labour pool and economy in the US, this is actually a very small percentage, and not something that will have any perceptible direct impact on the US economy, he added.

“Outsourcing has become an irreversible process and I don’t think it is major concern,” said Mr B.V.R. Mohan Reddy, Chairman and Managing Director, Infotech Enterprises.

“This is monumental! America will be inspired by the leadership of a young President with new ideas of change in domestic policy and foreign affairs. There is excitement and hope among the people of America and he has to deliver on big expectations. Obama’s fresh perspective on the issues affecting India will be welcome. India’s relationship with the US has greatly improved during the Bush years and it can only grow under an Obama administration, both at the political and economic level,” said Mr Ram Shriram, Managing Partner, Sherpalo Ventures and investor in many technology ventures in India, and a top-tier venture capitalist in the US.