Outsourcing Biggest Concern For India Post-Bush: Moody�s Arm

      Date Submitted: Fri Nov 28, 2008

NEW DELHI - Outsourcing by U.S. companies will be the biggest concern for India due to the change in U.S. administration next year, says a global research firm.

"For India, the biggest concerns perhaps in over its important outsourcing industry, as the practice of shifting jobs overseas had come under fire during the U.S. presidential campaign," Moody's economy.com, a subsidiary of global research firm Moody's Corporation, has said in a report.

In February this year, continuing to play the anti-outsourcing card, Obama, the then Democrat presidential front-runner, had said, while America cannot "shy away" from globalization, it would have to take measures to ensure that jobs are not shipped overseas.

"We have to stop providing tax breaks for companies that are shipping jobs overseas and give those tax breaks to companies that are investing here in the United States of America," Obama had said during a debate with rival Senator Hillary Clinton in Cleveland, Ohio.

However, Planning Commission Deputy Chairman Montek Singh Ahluwalia said on Nov 15 that the U.S. has given an assurance to India that the policies to strengthen bilateral ties will continue and felt that outsourcing, a hot topic during the U.S. presidential polls, will not be an issue. "They (U.S.) assured us that the new Administration would continue to strengthen the relations between the two countries," Ahluwalia told reporters on his meeting with former Secretary of State Madeline Albright, deputed by President-elect Barack Obama to meet world leaders currently in Washington for the G-20 summit.

The research firm added, India's outsourcing business depends on robust service industries in advanced economies, most of which are battling recession.

The apex body of Indian software and services companies, Nasscom, has expressed cautious optimism on working out mutually beneficial policies to boost the economies of both the countries after Obama won the presidential election.

The $40-billion software and B.P.O. export industry, mainly driven by outsourcing, draws 60 percent of its revenues from the U.S. India Inc has long  maintained that outsourcing has resulted in savings for the U.S. economy.    (PTI)