Ohio bans outsourcing to India, Infosys concerned

[nimo_cn]

I dont think that anyone has a right to lecture the US on free-trade, especially protectionist countries like China and to a lesser extent India.

Crap! Why can't we lecture US on free-trade?

What Ohio State Govt is doing is called protectionism, it is wrong.
Everyone is entitled to criticize you when you have done something wrong, even if you are American (especially when you are american, because you guys have been lecturing others for the last decades).

 

[neo29]

This is just the beginning ... we will see total outsourcing of jobs to India come down drastically. India does have a strong hold on the software industry and must capitalize it sitting at home front.

 

[arya]

well try to use as possible MADE IN INDIA

guys just think how will our Indian company will grow if if try to use our local product

every one will be happy

 

[Rahul92]

I don't think in democratic system we can implement & execute the plans as the communist china does

 

[amoy]

Don't pull ideology into anything.... Communist China or Democratic (again for political correctness??)... blah blah... sheerly interest clashes.

Protectionism is visible everywhere esp. in time of crisis. Governments are often succumbed to domestic vote bank politics in 'democracies'. Or even in a 'totalitarian' state gvnmts can't turn a deaf ear to volkstum sentiments even though in fact such actions often hardly 'save' any jobs for their 'own' people (often a gesture just to please the 'audience'). Established powers perhaps do it sometimes tactically or covertly in a 'disguise' (or with adept use of WTO rules to its own advantage).

Retaliation works even when the two sides of trading are asymetric. As precedents China hit back on import of airplanes or imports of agricultural produces like grain, wheat, soybean or corn from the US, in order to pull the US to the negotiating table for trade-offs to lift barriers for China's exports since interest groups (Boeing, or agricultural states) in the US related to those commodities under attack may lobby for China for their own sake.

 

[sandeepdg]

Ohio's ban to be counter productive to US: NASSCOM

Sep 9: Indian IT industry reacted disgracefully to Ohio state's decision to ban outsourcing and termed the Ohio's stand as "discriminative."
Buzz up!"Ohio's ban on outsourcing can only be viewed as counter-productive to the US government thrust on reducing public deficit and possibly lead to an increased tax burden on its citizens," said NASSCOM.

Expressing their concern over the issue, the company informed that they would take up the issue to US by the end of Sep 2010 and would ask help from union minister for Industry and Commerce Anand Sharma.

Supporting NASSCOM stand, Indian IT giant, Infosys also expressed its concern over the Ohio's bill to ban offshoring of IT services.

Indian IT Criticized | Ohio's Ban Discriminative | IT Outsourcing | NASSCOM - Oneindia News

 

[nrj]

'Whipping boys' decry Ohio ban on outsourcing

American politicians are at it again; hitting offshoring to cover up their failure to curb rising unemployment rates in the US.

This time, it is Ohio governor Ted Strickland.

On Tuesday he issued an executive order that prohibits spending of public funds for services provided offshore.

And though Strickland's diktat is not directly targeted at the Indian information technology (IT) sector, it is being seen as a big blow by domestic tech companies which are looking at tapping opportunities in the government and public services vertical in the US.

Many believe the Indian IT industry has become the favourite "whipping boy" for the US policymakers, who have been struggling to keep job losses in check since the global financial crisis set in late 2008.

"I am dismayed by the action of Ohio state. I think this is electoral posturing and the Indian IT industry is becoming a whipping boy," Subroto Bagchi, vice-chairman and Gardener at MindTree Ltd, said. He believes the US economy had fundamental cracks, but instead of addressing them the politicians were indulging in a "blame game". "It reminds me of India in the 1970s when we used to blame the so-called "foreign hand" for all ills. We have outgrown that. It is time, they did," said Bagchi.

On a different note, he said the Indian IT industry was not dependent on US government outsourcing.Turn to p12

"We largely work with the private sector, but this posturing could create a fear factor in them and lead to a lose-lose game."

The IT industry lobby Nasscom views the Ohio ban on offshoring government IT contracts as election rhetoric. It expects "more such electoral rhetoric" to come in the next few months. A statement issued by the industry association said Ohio's ban could be viewed as counter-productive to the US government's thrust on reducing public deficit and lead to an increased tax burden on its citizens.

In its view, international trade was a federal issue and would be tackled at that level. "Nasscom is leading a delegation to the US later this month and will be taking this up with relevant officials there. The team will also seek support from Anand Sharma, minister for industry and commerce, who is also visiting the US at the same time, to address this issue with his counterparts," said the industry body statement.

‘Whipping boys’ decry Ohio ban on outsourcing - Money - DNA

 

[nrj]

India will raise Ohio outsourcing ban with US: Anand Sharma

India said on Thursday it will formally raise its concern with the United States over a ban imposed by the US state of Ohio on offshore outsourcing at a high-level meeting in Washington. Ohio state has banned outsourcing of government information technology and back-office projects to locations such as India.

"It will be on the agenda. I will raise the issue at the TPF (Trade Policy Forum) meeting there, definitely," Commerce and Industry Minister Anand Sharma told reporters in New Delhi.

Sharma and US Trade Representative Ron Kirk will co-chair the September 21 meeting of the Trade Policy Forum, which is the principal forum for trade dialogue between the United States and India.

Indian officials said, however, while expressing "disappointment," India does not want to adopt a "confrontationist" stance ahead of US President Barack Obama's visit to India in November, the Press Trust of India reported.

Meanwhile, the National Association of Software and Services Companies (NASSCOM), said the move was "discrimination" and added it was imperative that the "focus on free trade remains strong."

However, the group, which represents India's top software exporters, said the ban would have little impact on Indian business as "the (US) public sector represents a small fraction in the overall demand for offshored services."

It also said the decision reflected election rhetoric ahead of US mid-term elections in November with domestic unemployment nearing 10 per cent and warned, "More such electoral rhetoric can be expected in the next few months."

Ohio Governor Ted Strickland issued an executive order prohibiting the spending of public funds for services provided offshore, saying that sending work abroad "deprives Ohioans and other Americans of employment opportunities."

NASSCOM said it would lead a delegation to the United States later this month and would "be taking this up with relevant officials."

The Ohio action comes on top of a US law passed last month tightening security at the Mexico border with measures paid for by steep hikes in fees for work visas.

Over half of the world's top 500 firms outsource work to India, which has become the world's back office where companies have set up call centres and number-crunching and software development outlets to cut costs.

India's second-largest outsourcing company, Infosys, said it was concerned about the ban, noting it came ahead of the mid-term polls.

"The Democrats need to demonstrate to people that they are doing everything they can to fix unemployment," Mohan Pai, an Infosys director told Indian network NDTV.

"But there is the fear of it (anti-outsourcing sentiment) spreading, which is worrying," he said.

India will raise Ohio outsourcing ban with US: Anand Sharma - Hindustan Times

 

[sandeepdg]

Ban on IT outsourcing: Higher pvt spend to offset govt curbs

Ohio's ban on offshoring of IT projects by state government departments will not impact Indian IT exporters in the short run, feel experts. This is because of the marginal share of government projects in the current outsourcing pie and the faster adoption of such services by the private sector.

However, the long-term scenario largely depends on the availability of skilled labour locally and also on how well outsourcing vendors strike a balance between local hiring and offshoring. According to industry estimates, government projects currently constitute less than 5% of total IT outsourcing work. Hence, at least in the immediate future, any governmental regulation or ban will not have significant impact on the outsourcing industry.

Industry trackers, however, point out that the share of government projects is bound to grow in future due to various e-governance initiatives across the world. Therefore, regulatory affairs may tend to restrict participation of offshoring vendors in this growing pie.

Another point worth noting is that such a protective stance by governments may not be easy to follow over the long term. Deloitte India's senior director Sanjoy Sen points out two important factors. "First, there is a huge skill shortage in the North American region. And two, the average population age is on the rise, which means the shortage of human resources is here to stay."

This means securing manpower locally would not be an effective measure of doing things in the long-run even for governments. A more feasible scenario is where outsourcing vendors opt for a judicious mix of local employment and offshoring. "Over the years, large Indian (IT) vendors have established subsidiaries across the globe. This would enable them to combine local recruitment with offshoring," says Mr Sen.

Amid the din over governmental ban, one interesting report by Gartner went almost unnoticed. The global research agency said on Tuesday that outsourcing is rising in Europe. According to Gartner, 53% companies in Europe intend to increase outsourcing in 2010. The survey further highlighted that the number of companies that spent more than 50% of their IT budget on outsourcing services also increased.

Europe has traditionally lagged behind the US in IT outsourcing. The latest Gartner report indicates that the scenario is changing fast. This further strengthens the belief of experts that outsourcing by the private sector would continue to grow in the coming years.

Therefore, going ahead, the growth in the private expenditure on outsourcing is likely to more than offset the possible fall in the governmental pie of offshoring.

Ban on IT outsourcing: Higher pvt spend to offset govt curbs - The Economic Times

 

[sandeepdg]

Ohio outsourcing ban won't impact Indo-U.S. business ties: Envoy

The U.S. on Friday sought to downplay the ban on outsourcing clamped by the government of Ohio, saying similar actions in the past have not affected Indo-U.S. ties which have grown to a far greater level.

U.S. ambassador to India Timothy Roemer said Ohio banning outsourcing of IT related work would not have any bearing on Indo-U.S. business ties and asserted that the partnership between the countries was "indispensable."

"I would refer you to statements by Infosys and other Indian companies which recently had said about Ohio action ...that they had very little, if any, impact on U.S.-Indian business," he told reporters here when asked to comment on the ban.

The ambassador said Indo-U.S. relations have reached to a new stage which now includes counter terrorism, green partnership, apart from trade and commerce.

"We are talking today about the indispensable partnership between the United States and India. We are talking about global cooperation between the United States and India on terrorism, counter terrorism, on economics and commerce, on job creation in both places, on green partnership and next green revolution.

"We are making considerable progress. India has moved from 21st largest trading partner to the 14th largest trading partner (of the U.S.) over the last five or six years. That is the real progress in this relationship," the envoy said.

Mr. Roemer said some similar actions from certain other states in the U.S. — passing resolutions banning outsourcing in 2005 — also did not affect Indo-U.S. relations.

Last month, Ohio Governor Ted Strickland of Democratic Party banned outsourcing arguing that this undermines economic development and has unacceptable business consequences for his state.

The Hindu : Business / Industry : Ohio outsourcing ban won’t impact Indo-U.S. business ties: Envoy

 

[Ray]

It is an interesting situation.

The US has always been clamouring that India opens up to international business and now she, herself, is clamming up.

 

[nrj]

It is an interesting situation.

The US has always been clamouring that India opens up to international business and now she, herself, is clamming up.

Very true & like someone rightly said "How come Indian outsourcing became sudden threat to American establishment?"

US is failing to address its unemployment problems & has found comfortable reason to blame Indian companies.

 

[Rahul92]

(wow obama really knows how to get votes) N:emot112w America is setting up examples for the world about free trade policies

 

[SixSigma1978]

They can't touch the 15 million illegal immigrants - so they're trying to tell the Americans they're doing SOMETHING about the jobs and immigration by kicking people who ARE accountable!!
Poor H1Bs - you tell them to leave - they leave. You tell them to work for a low salary - they do it. They don't commit crime, they always follow the rules -and they're kicked for simply being accountable - while the mexicans/africans illegals are not.
Wonder what will happen if Indians quit America! Their costs will most probably double - their HIGH and "efficient" labor force/engineers won't be able to compete with a cheaper and equally effective Asia - and their health services might even take a huge dent without Indian Docs and Nurses running their broken health system.

 

[Rage]

 

[nrj]

India flays US move to curb outsourcing, calls it regressive​

Union Commerce and Industry Minister Anand Sharma on Saturday termed as "regressive" the US moves to curb outsourcing and warned that protectionist tendencies would deepen recession. "Protectionist tendencies are unhealthy for any economy," Sharma said, addressing the staff of IT major Infosys Technologies here.

"Indian IT companies create jobs not only in India but in the US as well," he noted.

"Protectionist tendencies end up deepening recession," Sharma warned.

His caution came in response to the recent decision of Ohio state, US, to ban outsourcing IT projects and President Barack Obama's remarks against offshoring.

Infosys chairman and chief mentor N.R. Narayana Murthy said the only way out for Indian corporates was to innovate.

"There will always be geo-political issues that could create friction. While ministers like Sharma will take it up at appropriate levels, the corporations must keep innovating," he said.

"We have to look at innovating more and more so that our clients will realise the importance of outsourcing," Murthy said.

"Only way for any corporation to survive, succeed and grow profitably is to innovate," he added.

Sharma said Friday here that India will raise the visa fee hike issue with the US administration at the upcoming joint Trade Policy Forum (TPF) meeting Sep 21 in Washington.

India will also discuss the Ohio state ban and Obama's remarks.

"We have already flagged to the US government that we intend to place the visa fee hike issue on the table to discuss at the Forum. I hope they will reflect and we will be able to find a meaningful solution," Sharma said.

Asserting that the hike in H1-B and L1 visa fee was on the top of the Indian agenda, Sharma said he has conveyed the government's serious concern to US Trade Representative (USTR) Ron Kirk, who co-chairs the Forum with him.

"Though the Ohio ban on outsourcing is a state issue and Obama's remarks against off-shoring are a sovereign issue, we are going to discuss it at the Forum because eventually outsourcing plays a major role," Sharma said

 

[nrj]

Outsourcing ban wont affect ties - White House tech chief

Some damage control :angry_6:

NEW DELHI: A move by the American Ohio state to ban outsourcing projects to emerging markets like India and the shrill political rhetoric in the US on the subject ahead of the November Congressional polls will have no impact on the ties between the two countries, president Barack obama's chief technology officer said here Tuesday.

"In a democracy you will have voices that say things here and there. But you must look to the core. What is actually happening on the ground ... and in that area there is nothing but growth," said Aneesh Chopra, the White House chief technology officer, when asked about the Ohio state's bill to ban outsourcing of its IT projects and similar actions being mulled by others.

"I am confident these issues will be resolved because good people will sit around the table and think them through," :happy_2: Chopra told reporters on the sidelines of a CII conference.

The Ohio state government's action and President Obama's increasing pitch against outsourcing has created anxiety in Indian IT circles.

Obama last week said his administration will offer tax benefits only to firms that create jobs in the country, a move that may hit Indian IT firms in a big way.

The move was criticised by Commerce Minister Anand Sharma, among others, who termed the action as "regressive" and warned that protectionist tendencies would deepen recession.

Chopra, who is leading a high-level technology delegation and met government functionaries including the Unique Identity Authority Chairman Nandan Nilekani, said Obama's comments were being mis-read.

"I don't believe that it is a accurate reflection of the President's comments," said Chopra.

"Government investments in technology are modest in the scale of the overall economy. Maybe its an important thing to understand for everybody. The United States economy is very much market based, so whether a government chooses to do X or Y in its particular requirements, these are modest," he added.

According to India's apex IT body, Nasscom, the move was influenced by the November elections to the US Congress and Ohio governorship drawing closer. Nasscom president Som Mittal said more such electoral rhetoric could be expected in the next few months.

Chopra, however, hoped that the whole outsourcing issue would be resolved in a quick and mutually beneficial manner.

"Nobody is wrong, nobody is right. You sit down and think it through and each side needs to have their voice heard. Then you make progress. I am confident that this is the way it will be approached," said Chopra.

Sam Pitroda, chairman of the National Innovation Council, who was also present at the seminar on innovation exchange between India and the US, said: "The commerce minister and other functionaries know what to do. We have to support it."

But Pitroda said too much was being made out of the whole outsourcing ban controversy.

"You can't be hung up on one order cancelled. I mean it hurts someone whose order got cancelled, but as a nation you got to look beyond. Our key challenge is to go up the value chain," said Pitroda, who is also advisor to the Prime Minister on public information infrastructure.

Outsourcing ban won't affect ties: White House tech chief - The Economic Times

 

[lurker]

Why would talking to the Federal gov. solve anything? They have very little power over the issue, aside from rhetoric. Any attempt at action would kill their election chances in said state and bring up the issue of them trampling on state powers, and this IS a state power.

Lets keep this within bounds, This is about the state of Ohio, not the US. You'd see a lot more reaction around the world if IT outsourcing was banned wholesale.