Indian IT industry which derives nearly 60 percent of its revenue from U.S. is paying no heed to the proposed legislative measures in the country that aim to put brakes on shipping jobs to other countries. India is expected to close the year to 31 March with $49.7 billion in revenue from export of IT and back-office services.
The industry body, Nasscom, says growth in exports for the next financial year would be between 13 percent and 15 percent, reports Livemint. India has a 12 percent share in the outsourcing market and a 51 percent market share in the offshored services market. Still, neither Nasscom nor large Indian firms are willing to take any chances and have employed specialized lobbying firms to highlight to the US legislators the benefits of outsourcing and offshoring.
Tata Consultancy Services (TCS) Chief Executive N. Chandrasekaran said that the proposed legislation, which will withdraw tax incentives to companies that offshore jobs, will not have any impact. “I don’t think so,” said Chandrasekaran. He added that TCS would be monitoring the situation closely and develop its own strategy.
The anti-outsourcing and offshoring law, in its present form, pertains to the operations of overseas subsidiaries of US companies and the profits they make overseas, said Nasscom President Som Mittal. The Obama administration argues that because the U.S. tax laws offer firms incentives to invest and keep income abroad, American companies tend to reinvest their earnings in foreign locations such as India – expanding there, and depriving Americans of jobs and the U.S. of tax income.
Surjeet Singh, the Chief Financial Officer of Patni Computers, seconded Mittal’s opinion and said the proposed legislation is hardly a threat and that the current outsourcing model is mature and can handle minor bumps such as a tax rebate being withdrawn.
Source:http://live.iencyclopedia.org/2010/02/indian-it-dont-cares-barack-obama.html
