The Hindu Business Line : ‘Immediate slowdown in US outsourcing to India unlikely’

Kolkata, Nov. 10 There might not be any immediate slowdown or curb in the US outsourcing to India, according to Mr Adrian P Kendall, Honorary Consul of the Federal Republic of Germany.

It might not be viable to curb outsourcing on a wholesale basis, he said. “I would not expect outsourcing to be an immediate priority for the Obama administration at present as they have far more important issues to tackle with, like that of the current financial crisis,” Mr Kendall pointed out.

The new administration could possibly announce certain disincentives such as a tax penalty for outsourcing. It might not be possible for the American administration to completely in-source in the short-term basis. “Higher tax penalty would mean that the cost of goods would go up. This will in turn be passed on to the consumers. American consumers are already under great pressure and are feeling the pinch in their pockets,” he said.

Talking about the German investments in West Bengal, Mr Gunter Wehrmann, German Consul General in Eastern India, said, there has been a slowdown in German investments into the state. “No German investor has come forward for investments into the state. They plan to wait and watch until a large Indian company is able to set up a unit in the state in a peaceful environment,” he said.

According to him, the bilateral trade between India and Germany has been growing by leaps and bounds. Capital goods and equipment comprise the major imports from Germany into India while textiles are the major exports from India, he said.

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