The Hindu Business Line : ‘IT critical for US competitiveness’

Bangalore/New Delhi/ Hyderabad, Nov. 5 Notwithstanding past apprehensions over Democrat Mr Barack Obama’s anti-outsourcing stance during the run-up to the polls, the Indian IT industry today welcomed his Presidential victory.

The IT industry also exuded confidence that outsourcing will continue to play a critical role in keeping American companies competitive.

“Today, the tech resources are in shortage in the US and technology plays an important role in transforming companies. The IT and BPO industry has a significant role to play,” said Mr Som Mittal, President of the National Association of Software and Services Companies.

Making a strong anti-outsourcing pitch in August this year, Mr Obama had said he would stop outsourcing of jobs to other countries by ending tax breaks to companies.

Shortage of resources

Asked if the President-elect would signal a reduction in outsourcing, Mr Mittal said, “Outsourcing does not necessarily mean IT and BPO services. The largest unemployment (in the US) is in the manufacturing, and not in the tech space. Tech resources continue to be in shortage,” he said.

He added that with US companies witnessing transformation and integration, the role of the IT industry would become more important.

Commenting on the implications for the Indian IT industry, Mr N.R. Narayana Murthy, Chairman, Infosys Technologies, said, “We believe the President-elect, Mr Obama, to be a pragmatic leader who understands that American industry needs to be competitive, not just in America but elsewhere as well.”

“Mr Obama’s manifesto said globalisation is here to stay and instead of trying to turn the clock back, America should embrace the future,” said Mr Girish Paranjpe, Joint CEO of Wipro’s Technology business.

“Mr Obama had declared himself to be flexible on visas and had said that there should not be mandatory limits, but should be linked to market conditions.”

‘Outsourcing inevitable’

The Indian industry has been concerned that the Democratic regime in the US could reduce the visas and work permits.

“We don’t believe there will be any significant impact on the visa front. The US needs IT skills and because of the current situation, wherever they are trying to improve efficiencies, they need to offshore,” said Mr V. Balakrishnan, Chief Financial Officer, Infosys.

“Mr Obama’s election will not affect outsourcing, which is inevitable. Jobs will go wherever they are handled most effectively,” said Mr Sarath Sura, Managing Director, Sierra Atlantic.

Mr Pramod Bhasin, Genpact President and CEO, said that the overall economic situation was the top concern for Indian IT industry. “Mr Obama’s win is historic. But the larger issue for the Indian IT sector is the economic situation.”

Technology stocks, which have already factored in the Obama’s election, ended almost flat on the BSE in a weak market where the Sensex shed almost five per cent.

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