Obama’s outsourcing stand relieves Indian IT industry (Lead)

November 10th, 2010 - 8:41 pm ICT by IANS  

Barack Obama Bangalore, Nov 10 (IANS) The Indian IT industry Wednesday expressed relief over US President Barack Obama’s stand on outsourcing and his commitment to do away with protectionism.

“Obama did a great job for our industry by terming them (anti-outsourcing lobbies) stereotypes. I think his administration will also do a great job in terms of changing those stereotypes,” IT industry body Nasscom president Som Mittal told reporters here.

For positioning India as the market for US businesses and declaring India was no longer emerging but had emerged, Mittal said the industry would support the US administration’s efforts to change the stereotypes.

“I think we too have to do our job to change those stereotypes and ensure there is a much larger community that understands our business model that we are part of the solution rather than creating the problem,” Mittal said on the margins of Nasscom’s annual Product Conclave & Expo 2010.

Expressing the industry’s satisfaction over the outsourcing issue figuring in discussions between Obama and Prime Minister Manmohan Singh Monday, Mittal said both the governments had committed to do away with protectionism.

“Obama and Manmohan Singh have both spoken out against protectionism and curbs on outsourcing. It was part of their discussions. Both the governments have committed to protectionism not being the way forward,” Mittal asserted.

Recalling the prime minister’s statement at a joint press conference with Obama in New Delhi Monday that India was not in the business of stealing American jobs, Mittal said the Indian IT industry was actually adding value to US corporations.

He also noted that General Electric chairman Jeffery R. Immelt and United Technologies chairman Louis Chenvert had said at the India-US Business Council summit in Mumbai Saturday that they are “winning export deals from the world over and creating jobs in the US because they are able to do design work in India and be able to shorten the product cycle”.

Addressing Indian honchos and American business executives accompanying him in Mumbai Saturday, Obama asked them to look at issues like outsourcing and market access with a fresh perspective that reflected the present market dynamics.

Moving away from the election rhetoric, Obama also sought to dispel the notion that the US was becoming protectionist and said old perceptions and stereotypes needed to be done away with.

“And there still exists a caricature of India as a land of call centres and back-offices that cost American jobs. That’s a real perception,” the president recalled.

Admitting that the rhetoric against outsourcing was a sentiment driven because of high job losses in the US, Mittal said both the governments had assured the industry that its perspectives were understood.

“We hope this message is carried back to the US people by its administration and the media. We also hope that the US Congress will understand our industry’s business model. It is a different matter that those job losses happened to be in manufacturing, retail and construction. In fact, there is net hiring going on in the services if we go by the US labour statistics,” Mittal said.

Noting that job creation in the US was going to take time and hence the industry had to be sensitive about it, Mittal said job recovery would happen faster when exports double.

Studies have proven that as in India, for every IT job, three-four indirect jobs are created in the US too. More than jobs, it is the value the Indian IT industry added.

If it wasn’t for the severe depression during the past two years, data shows globalisation, including higher manufacturing in China, actually did not result in job losses in the US but saw average salaries go up.

“We must realise that we are reacting to a very significant event that happened due to the financial crisis. It is going to take time to recover…,” Mittal added.

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