President Barack Obama has told Congress that he will end tax breaks for companies that ship jobs overseas, triggering panic within the Indian IT industry. But, argues Dinesh C Sharma in YaleGlobal Online, IT analysts are not particularly perturbed, knowing that offshoring can save firms money and jobs during hard times while encouraging fast delivery of new products and the flow of new talent.
Ever since taking over as US president, Barack Obama has caused some nervous moments for India’s gigantic outsourcing industry, which depends on American corporations for the bulk of its business. First, it was the issue of curtailing the number of H1B visas that allow foreign workers to take up employment with US companies. Then came the announcement about “ending tax breaks for corporations that ship our jobs overseas” in his February 24 speech to Congress.
So, is India’s outsourcing industry in trouble? A closer look at India’s information technology sector where US involvement is the deepest shows it to be a storm over an Indian teacup.
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