The recent pronouncement by US President Barack Obama to bring outsourcing jobs back to the US highlights the dangers of relying on business process outsourcing (BPO), and on foreign economies in general, for Filipino jobs. Even if it is still unclear if Obama’s proposed “insourcing” legislation will pass, the vulnerability of the sector and the government’s misplaced attention to this is increasingly apparent.

The “insourcing” initiative has been dismissed either as mere election-related rhetoric or in any case as unlikely to prosper against corporate lobbying, such as by the Business Processing Association of the Philippines (BPAP). But the initiative is just another example of adverse trends facing the sector and more of this are likely to emerge as the crisis in the US and the rest of the world worsens in the coming years.

Government and industry estimates for the BPO are of 1.3 million jobs and US$25 billion in revenues in 2016. These are unlikely and it will be recalled that the original BPO “Roadmap to 2010” target was for 1.0 million jobs and US$12 billion in revenues in 2010 – of which only 525,000 jobs and US$8.9 billion materialized.

As it is, the growth of the BPO sector is already slowing slightly in terms of jobs and revenues. The 21.9 percent growth in BPAP-reported jobs in the sector in 2011, to an estimated 640,000, was slightly slower than the 24.1 percent growth in 2010. Similarly the 22.5 percent reported growth in revenues, to some US$10.9 billion, was slightly slower than the 25.3 percent growth in 2010.

The slowing global and, in particular, US economy appears to have affected the sector’s performance despite the country reportedly having nudged India out as the world’s leading BPO center. The World Bank has previously estimated global economic growth to have fallen to 2.7 percent in 2011 from 4.1 percent in 2010 and US economic growth from to 1.7 percent (2011) from 3.0 percent (2010). Developments in the US economy are particularly relevant because the latest Bangko Sentral ng Pilipinas (BSP) data notes that the US accounts for 72 percent of foreign investment and 80 percent of BPO service exports.

It can for instance be noted that the trend in the deployment of Filipino nurses to the US dropped from 649 in 2008 to just 85 in 2010. In his campaign for the US presidency, President Obama campaigned for prioritizing American nurses over migrants declaring: ““The notion that we would have to import nurses makes absolutely no sense.” Recently, the Democrats’ House Bill 1933 reviving temporary visas for registered nurses was approved by Congress. Among others the bill limits the number of H1-C temporary registered nurse visas to 300 per year from a previous quota of 500 annually.

The government has so far budgeted at least P575 million in subsidies for private foreign BPO investors consisting of trainings, curriculum and teacher development, career marketing and scholarships through TESDA and CHED. These funds are more productively spent supporting Filipino industry, science and technology than for a sector that is such a small part of the economy and by its nature will never give much value-added. The BPO sector is barely integrated into the local economy outside of its relatively few jobs and so does not stimulate or encourage domestic production.

IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.

Source:http://globalnation.inquirer.net/24291/obamas-insourcing-highlights-risks-of-relying-on-bpos

The 22 years I spent as a reporter before entering the teaching field left me with a healthy skepticism for any words escaping the lips of politicians.

That being said, I was encouraged by President Obama’s State of the Union address Tuesday night.

My optimism had nothing to do with the president’s kind words about teachers and his statement that we should not be “teaching to the test.”

As long as Arne Duncan is his secretary of education and Race to the Top is his blueprint for improving American schools, I will have a hard time believing those words.

It was the sizable portion of the speech dedicated to improving the lot of America’s middle class that provided the most hopeful words for teachers, students, and parents. Especially the following passage:

First, if you’re a business that wants to outsource jobs, you shouldn’t get a tax deduction for doing it. That money should be used to cover moving expenses for companies like Master Lock that decide to bring jobs home.

Second, no American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas. From now on, every multinational company should have to pay a basic minimum tax. And every penny should go towards lowering taxes for companies that choose to stay here and hire here.

Third, if you’re an American manufacturer, you should get a bigger tax cut. If you’re a high-tech manufacturer, we should double the tax deduction you get for making products here. And if you want to relocate in a community that was hit hard when a factory left town, you should get help financing a new plant, equipment, or training for new workers.

My message is simple. It’s time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America. Send me these tax reforms, and I’ll sign them right away.

For years, our system has been stacked against the middle class and the public educational system that has been the heart of that segment of our nation.

Jobs are shipped overseas, and we are told that schools are failing because we are not preparing the displaced workers for the new and different jobs.

Meanwhile, as the number of those without jobs increases, the poverty level skyrockets, and as everyone except the so-called “educational reformers” understands — poverty, not “bad teachers” has been the number one problem in our failing inner-city schools.

By targeting teachers, those who have made millions by outsourcing jobs have effectively turned the conversation away from their own role in America’s current economic situation, including their sizable impact on public education.

With this has come a push to send students to college who, quite frankly, have no business going to college and would never have needed higher education in the past. College and university officials complain about students who come to their institutions lacking basic knowledge and those who bash public education use that as evidence that our schools are failing.

It seems far more likely that we are sending students to our college campuses who in past years would have made a comfortable living doing decent-paying work in our plants and factories.

Higher education should be available for everyone, but it should not be an absolute requirement to live a successful life in this country.

At the same time that more students are being pushed into higher education, the shell game continues. Many of the white collar jobs that we have been told repeatedly would be available are being outsourced and as more and more Americans are sinking tens of thousands of dollars into higher education, their reward could well be a lifetime of debt and either long-term unemployment or richly rewarding work greeting Wal-Mart customers or handling drive-through orders at McDonald’s — useful jobs that should be available to the young who are getting their start in the workplace, not to those who have diplomas that don’t mean a thing in our diminished workforce.

As the people at the very top of the totem pole become wealthy beyond their wildest dreams, those of us who choose to criticize their selfishness and lack of patriotism are castigated and accused of practicing “class warfare.”

Public education is, and always has been, a reflection of society. We teach the value of hard work and instill in the children who come into our classrooms every day the idea that with that hard work they will be able to accomplish success.

With each day that we hear national, state, and local candidates preach the gospel that we must cut taxes on job providers who never seem to provide any jobs and eliminate services for the people whose jobs have been cut out from under them, it becomes harder for teachers and students to buy into those traditional American values.

What President Obama promised Tuesday night in his State of the Union message was a return to an America where the hard work and patriotism are prized and where those who contribute the most to the American dream, not those who consider it just another commodity to be exported, are those who will reap its rewards.

Source:http://www.huffingtonpost.com/randy-turner/obama-state-of-the-union-_1_b_1233610.html

US President Barack Obama proposed several tax measures aimed at encouraging American companies to bring jobs back home, a move that is expected to have an adverse impact on the Philippines’ growing outsourcing industry.

In his annual State of the Union speech on Tuesday evening (Wednesday morning, Manila time), Obama laid out a vision for strengthening the US economy in an election-year by focusing on tax inequality and making the case for his economic leadership.

“Tonight, my message to business leaders is simple: Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed,” he said.

“It’s time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America,” he added.

Obama’s proposed tax measures are seen as affecting the Philippine outsourcing industry, the second largest in the world, which is heavily reliant on US-based companies.

While the US economy is now recovering, Obama blamed outsourcing for weakening it in the first place. “No, we will not go back to an economy weakened by outsourcing, bad debt, and phony financial profits,” he said.

Obama proposed changing the US tax code that currently gives tax breaks to companies that outsource jobs overseas.

“If you’re a business that wants to outsource jobs, you shouldn’t get a tax deduction for doing it. That money should be used to cover moving expenses for companies like Master Lock that decide to bring jobs home,” he said.

The US President said no American company should be allowed to avoid paying taxes by moving jobs and profits overseas.

“From now on, every multinational company should have to pay a basic minimum tax. And every penny should go towards lowering taxes for companies that choose to stay here and hire here,” Obama said.

He also proposed giving tax breaks for American manufacturers, especially high-tech firms, that have operations in the US.

“If you’re an American manufacturer, you should get a bigger tax cut. If you’re a high-tech manufacturer, we should double the tax deduction you get for making products here. And if you want to relocate in a community that was hit hard when a factory left town, you should get help financing a new plant, equipment, or training for new workers,” he said.

Obama told Congress to approve these tax reforms and he will sign it “right away.”

Many American companies have been outsourcing their call center services to the Philippines and India in recent years, since wages here are much lower than in the US.

Some Americans blame outsourcing for the lack of job opportunities in the US, which continues to grapple with high unemployment.

The outsourcing industry is one of the bright spots for the Philippine economy. The outsourcing workforce grew about 10% in 2011 to 600,000, according to the Business Processing Association of the Philippines.

Outsourcing was also expected to generate revenues of $11 billion in 2011, up from $8.9 billion in 2010. It is seen to continue growing by at least 15% annually to hit $20 billion by 2016.

Source:http://www.abs-cbnnews.com/business/01/25/12/obama-wants-us-firms-stop-outsourcing

Barack Obama and the late Steve Jobs had a terse exchange last February, over Apple out-sourcing the manufacturing of its famous products, the Economic Times.

The New York Times had reported on this matter last February, and had said that when Jobs was about to give an answer, Obama interrupted him with a query and asked ‘what would it take to make iPhones in the United States?’

It wasn’t long ago that Apple used to brag about its products being made in America, but nowadays almost none of the 70 million iPhones, 30 million iPads and 59 million other products sold last year, are made in America.

According to an insider, Obama had asked, “Why can’t that work come home?” and Jobs’ reply was clear-cut, “those jobs aren’t coming back”.

That wasn’t the first time that Obama and Jobs had a standoff. Jobs’ biography says that the Apple founder had told the US President that he was “headed for a one-term presidency”, mainly due to his administration’s business policies, the Politico reported.

According to the biography, written by Walter Isaacson, Jobs was an admirer of Chinese business practices and was a critic for the US regulations as well as labour rules.

Source:http://www.theborneopost.com/2012/01/24/obama-and-steve-jobs-argued-over-outsourcing/

It was a big pressure month for Indian outsourcing company. Frequently bad or probably hard news keep coming for them from country of Mr Obama. Some time, Utah Govt ban on outsourcing, other time Extra tax on outsourcing. Don’t Hire Web Designer or Web developer at Bangalore. So though there are many face of monster but outsourcing company was under pressure of these monsters.

We need to give credit to Indian outsourcing Companies in india, they played a brave game and instead of getting panic they maintained bold and strong face. We see few comment hear and there from Some CEO but on a whole, most preferred to maintain and watch the development.

Lets put your thought a bit in depth about core issue of USA. Unemployment seems there biggest issue. That’s true and I guess most of you will agree. But lets use of of most used quality tool to find root. Why unemployment is so high?

America use to be considered as dream for development and infrastructure. Where did they miss the route? I see its continuous failure by there thought leader or lack of long term vision. Last 2 decades, they spent a lot more on war rather education and R&D. The USA known for Innovation and inventions became more of ego and reckless behavior. Moving away from political and administrative view to business and technical view, USA lost or started loosing edge on innovation.

When Mr Obama visited india, outsourcing company india, were expecting some bomb will fall on them, they kept there finger crossed and were in alert mode. But seems Mr Obama decided to play soft and try to pass the message bro I am with you. I have problem, please help me, intern I assure reciprocating support to you.

Probably this was best gesture can be expected from Mr Obama. He was not agenst outsourcing company India or Hire Web Designer at Bangalore or outsourcing at all.

But he want to say Bro now lets play two way game. You have grown up so don’t expect only me to give you every thing. And you can have all benefits or freedom of kids with responsibility. So I give you job that fit to your skill set and you give me job that will fit to my skill set. We treat you as a grown up so expect you to start taking your responsibility and don’t just look to me for all your problem.

Thanks a lot Mr Obama, We understand your message and take it as a good and sincere friend.

Abstracts: Mr Obama’s visit to india is a good example for balance between political ambition and economical ambitions. He leaved to best of behavior can be thought for the country head like usa.

Source:http://pinoypen.com/mr-obama-and-outsourcing-company-india-11047

The resilient Indian IT industry Wednesday lauded US President Barack Obama for terming those against outsourcing as holding onto old stereotypes and for committing to do away with protectionism.

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

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

“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 itself,” Mittal said on the margins of Nasscom’s annual Product Conclave & Expo 2010.

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

“Obama and Singh have said that (against protectionism and curbs on outsourcing). It was part of their discussions. Both the governments have committed to protectionism not being the way forward. It is the open markets that are going to lead to this,” Mittal asserted.

Recalling the prime minister’s assertion at the 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 the US corporations.

“General Electric (GE) chairman Jeffery R. Immelt and United Technologies chairman Louis Chenvert said at the India-US Business Council summit in Mumbai Saturday how 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,” Mittal noted.

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.

Source:http://www.thehindu.com/business/Industry/article878260.ece

Jeff Immelt’s message was clear. If India wants to escape protectionist pressure on its IT outsourcing sector, it needs to up the pace on infrastructure delivery and give more opportunities to US companies.

Speaking at the US-India Business and Entrepreneurship Summit in Mumbai, Immelt, the boss of GE, said the US had been let down by a sector of the Indian economy that held promise but where spending was slight. “You guys are not living up to your side of the bargain,” Immelt told a room full of India’s top executives. “There is a trillion dollars of infrastructure investment in India and it’s not happening.”

His advice is: engage US companies in modernising the Indian economy, and the rumpus over ‘offshoring’ and jobs moving from Buffalo to Bangalore will die down.

Infrastructure development – energy, transport and airports – is often touted by India’s government and leading businesspeople as where investment will flood in.

But with the exception of high profile projects like Delhi international airport and Mumbai’s congestion-relieving sea-link, progress is painfully slow. As a result, the country’s growth is shackled by poor roads, clogged ports and power shortages.

“There is no reason that our [US companies] infrastructure revenues should not be the same as in China…Let’s make the infrastructure happen,” urged Immelt.

The American industrialist was not alone in sharing his forthright views.

Mukesh Ambani, the chairman of Reliance Industries and a man usually careful not to give away too much, showed he was no Sino-phile in the cause of boosting India’s attractiveness to the US.

Only days after his brother, Anil, signed an agreement to buy $10bn worth of power equipment from with Shanghai Electric, Ambani said there was little trust between Indian and Chinese companies. By comparison, India and the US saw more eye to eye, he said.

Trust, however, will not sustain the promising US-India relationship alone. GE and others want contracts, and, in Immelt’s words, a fair bargain.

Halting progress spells bad news for the likes of outsourcers Infosys, Tata Consultancy Services and Genpact, and their access to the US economy. Their equivalents in China, on the other hand, might fare a little better.

Source:http://blogs.ft.com/beyond-brics/2010/11/07/obama-in-india-shooting-from-the-hip/

The keenly awaited visit of the U.S. President Barack Obama to India is expected to be more significant one politically as well as economically compared to his predecessors. Sending out a strong message of hope and change not only to the U.S. but also to the world, President Obama assumed office in January 2009, in the midst of the worst ever economic scenario the world witnessed since the Great Depression of 1930s.

Prime Minister Manmohan Singh was President Obama’s first official state visitor in November 2009. Mr. Obama’s visit to India in the first term of his Presidency marks the commitment of the U.S. administration towards India, the emerging economic power in the region. The President will spend three days in India.

Recognising India as a key to strategic U.S. interests, the U.S. has sought to strengthen its relationship with India, said a note of the U.S. Department of State on U.S.-India relations. The two countries are the world’s largest democracies, both committed to political freedom protected by representative governments. India is also moving gradually towards greater economic freedom. The U.S. and India have a common interest in the free flow of commerce and resources. They also share an interest in fighting terrorism and in creating a strategically stable Asia.

There were some differences, however, including over India’s nuclear weapon programmes and the pace of India’s economic reforms. In the past, these concerns may have dominated U.S. thinking about India, but today the U.S. views India as a growing world power with which it shares common strategic interests. A strong partnership between the two countries will continue to address differences and shape a dynamic and collaborative future.

Important signals

“There are four important signals that the President Obama is sending to the world which defines this visit in a unique manner,” says Amit Mitra, Secretary General, Federation of Indian Chambers of Commerce and Industry (FICCI).

President Obama is coming to India during his first term of office contrary to both President Bush and President Clinton. Both came only in their second term. He is not going to Pakistan unlike both Mr. Bush and Mr. Clinton. So the part hyphenation between India and Pakistan has been eliminated. This is the longest trip to India by any U.S. President; and a delegation of over 200 business leaders from the U.S. is accompanying him, half of whom are from small and medium enterprises with major technology capabilities.

“We are looking forward to taking the Indo-U.S. relationship to new territories,” Dr. Mitra adds. Another leading industry body, Confederation of Indian Industry (CII) is hopeful that the interaction with Indian businesses and President Obama will result in concrete decisions and actions, including joint collaborative work in agriculture, energy, education and infrastructure. Enhanced high technology cooperation is also expected through bilateral agreements in aviation, space, defence and biotechnology. CII is also optimistic that there will be movement in easing export control regulations, early conclusion of the proposed Totalisation Agreement as well as speedy negotiations of the Bilateral Investment Treaty.

“The U.S. has always been one of the leading investors in India. In recent years, Indian FDI in the U.S. has been growing at a much higher rate than U.S. FDI in India. In fact, Indian companies are investing immensely in the U.S., creating jobs, running training programmes, engaging in merger and acquisitions (M&A) activity, undertaking research and development (R&D) projects, and increasing their contribution across multiple sectors,” says Chandrajit Banerjee, Director General, CII, in a statement.

The fact that President Obama’s first public appearance in India will be at a business summit reaffirms that bilateral economic relations lie at the centre of the U.S.-India strategic partnership,” Mr. Banerjee adds.

Bilateral trade

One of the key issues President Obama wants to emphasise during his visit is U.S. exports. U.S. officials are projecting that the bilateral trade with India may touch a record level of about $50 billion this year. According to them, defence, climate change, science and technology, education, health, clean energy, trade, market access and high-tech exports were on President Obama’s agenda. He has pledged to double the bilateral trade within five years as a way to boost domestic growth and job creation

These are the times that the U.S. is having a strained economic relationship with China. The U.S. has major contentions with China on valuation of its currency yuan.

The U.S. leaders were accusing China for keeping its currency artificially undervalued to take advantage of export competitiveness. China is a major trade partner of the U.S. Other than software, India’s trade with the U.S. is lagging behind China in every area, especially in the manufacturing sector, where China is much ahead of India. In these trying times, the U.S. needed an economic ally that is India. India, on its part, should be able to channelise its trade ties with the U.S. for the benefits of its manufacturing sector.

Technology is the engine for India’s growth and trade ties. India is in competition with China in manufacturing as well as exports as both the nations are stimulating their growth processes.

The U.S. also sees a great potential for exports to India. With 1.2 billion people and an economy growing expected to grow at 8 per cent a year for the next several years, “we really see India as a potentially important market for U.S. exports,” says Mike Froman Deputy National Security Advisor for International Economic Affairs

U.S. goods exports have already quadrupled over the last seven years to about $17 billion. And service exports have tripled to about $10 billion a year.

“So it’s a fast-growing economic relationship. And it’s a two-way street as well. Indian companies are the second-fastest-growing investors in the U.S. And they are creating they now support about 57,000 jobs here in the U.S. So it’s a great market for U.S. exports. It’s a good place source of investment for the U.S. There are lot of jobs in the U.S. tied to both of those things. And that’s the reason why the President will be in India, focusing, on the first day on the economic and commercial relationship,” says Mr. Froman.

Contentious issue

India’s trade relationship with the U.S. is broadly balanced, as acknowledged by U.S. officials. However, outsourcing of U.S. jobs to India would continue as a contentious issue.

The U.S. President is concerned about outsourcing U.S. jobs as the unemployment level in the U.S. is at historically alarming levels. The U.S. officials say that President is likely to emphasise that while that is part of the relationship, India is also a potential market for U.S. exports and a source of investment back in the U.S. And so it’s more than a unidimensional relationship and it’s a tremendous opportunity for goods, services, agriculture that “he’ll be pursuing while he’ll be in India for supporting jobs back here in the U.S.”

Unlike his predecessors, President Obama’s visit to India is likely to take the Indo-U.S. economic relationship to new territories.

Source:http://www.hindu.com/biz/2010/11/01/stories/2010110152292000.htm

Presidential biographer William Chafe believes Barack Obama may talk tough in the United States about clamping down on outsourcing jobs to India, but the president’s international upbringing and perspective make it extremely unlikely he’ll ever actually walk the walk.

Mr. Chafe, who is finishing a biography of Bill and Hillary Clinton and has also authored a series of essays on how personal crises affected the public decision-making of eight American politicians, says Mr. Obama’s background makes him unique in the history of American presidents.

Not only is Mr. Obama the only president who spent his childhood years in an Asian country—Indonesia —but he’s also the only one known to be of a mixed racial background and whose seminal political experience involved working as a community organizer in a slum.

“So unlike Ronald Regan who saw Russia as the ‘evil empire,’ or George Bush, who spoke of the ‘axis of evil,’ Obama doesn’t deal in binary terms,” says Mr. Chafe, a longtime American history professor at Duke University who is now vice provost for undergraduates at the school. “Obama wants to engage the rest of the world on its own terms, in a dialogue of respect.”

As India prepares for Mr. Obama’s visit later this week, there has been speculation about the dialogue that will take place between him and Indian Prime Minister Manmohan Singh on sensitive topics such as U.S. companies’ outsourcing jobs to India. With the American economy still struggling with high unemployment, the exporting of jobs to India—a hot topic during Mr. Obama’s election campaign—remains a sensitive subject.

Mr. Chafe spoke to India Real Time Friday in Mumbai before he delivered a talk at the Trident hotel in the Bandra Kurla complex, entitled, “Barack Obama: The Historical Challenges He Faces.”

Where President Clinton “grew into an international role” in his second term, becoming obsessive about trying to win peace in the Middle East, Mr. Obama started his presidency with a strong international understanding, Mr. Chafe says.

Because of his background, Mr. Obama will likely be even more pro-India than Mr. Clinton, according to Mr. Chafe.

“Obama recognizes the 21st century is in India and China—not in Europe,” says Mr. Chafe. “Obama is going to be more open in recognizing the power of India and the power of the Indian economy.”

But Mr. Obama will arrive in India at a difficult time in his own life, likely having suffered a serious political defeat in the Congressional elections in the days before his visit, Mr. Chafe says.

Because of his stable temperament, Mr. Obama likely won’t be thrown into a funk by the defeat, Mr. Chafe said. His confidence in Mr. Obama’s stability comes from the “remarkable discipline and steadiness” Mr. Obama showed during the presidential campaign.

Mr. Chafe said Mr. Obama “is not going to interfere with companies doing what they need to do to be competitive.”

“He’s too smart,” Mr. Chafe says of the president. “Obama may make rhetorical gestures to those who want him to be more protectionist, but he won’t do it because it would set off a cycle of retribution that is not in America’s best interest,” Mr. Chafe said.

“Mr. Obama understands what he really needs to do—which is create a more stable global community–to push for a truly global economy and to address serious global concerns like climate change.”

Source:http://blogs.wsj.com/indiarealtime/2010/11/01/why-obama-wont-walk-the-walk-against-outsourcing/

A controversial clause requiring corporate honchos attending US President Barack Obama’s business meet in Mumbai to share information on whether their companies are in the ‘outsourcing’ or ‘BPO’ business has been removed from registration forms in the wake of protests by the Indian business community.

Both the clause and a proposed attendance fee for participants have been dropped, a senior executive associated with the country’s $60-billion IT industry said.

“The clause on BPO and outsourcing was felt to be intrusive and has been taken off. Companies will not be required to give any details of how many Americans they employ. There is (also) no fee for attendees,” the executive said. He said the online registration form no longer required these details, even if some older forms may still have them.

“Companies had objected to it. The issue was taken up officially and it was confirmed that this data was not required,” he said. An official with Nasscom, the country’s apex software industry organisation, said the association had sought a clarification and had been told that the information was no longer required.

The event is being organised by the US-India Business Council, along with the Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce and Industry (Ficci). “It was probably just part of an exercise to get to know the audience,” the Nasscom official added.

With unemployment rate in the US hovering near 10%, the number of US locals that Indian software exporters employ in their largest market has shot into prominence. It has also become a politically sensitive subject with elections approaching in the US.

Several protectionist measures are also being proposed. Senators Dick Durban (Democrat) and Chuck Grassley (Republican) have proposed a bill that will restrict large companies (employing more than 50 American employees) from getting any additional work visas, if over 50% of their US workforce is H-1B or L-1 visa holders.

Nasscom, which has opposed such protectionist measures by the US government, will not directly take up any of these issues during the US president’s visit to India. “It (Nasscom) has been in close dialogue with the Indian government. The Indian government is aware of how important these issues are and they will be part of the discussions between the Indian government and the US president,” said a Nasscom member.

The finance minister and the commerce minister are expected to take up the issue of proposed restrictions on issue of visas as well as the recent visa fee hike in the talks with Obama. “India is a huge market. US companies want to participate in big deals in defence, nuclear and aviation here. They want the retail sector to open up. It has to be quid pro quo. (India) importing computers and software is not different from (US) importing services,” the Nasscom member said.

Source:http://economictimes.indiatimes.com/tech/ites/Controversial-clause-on-outsourcing-taken-off-from-registration-forms/articleshow/6849285.cms

Infosys mentor N R Narayana Murthy has said the country’s citizens should extend “Indian hospitality” and not foc US on outsourcing issues during US President Barack Obama’s visit next month.

“Obama would an honoured guest and should be be treated in the Indian tradition and philosophy of ‘athithi devo bhavo’ (a guest is like God), without any expectations from him,” Murthy said on the sidelines of a CII event here last night.

When asked if outsourcing issues should be at the top of the agenda for Indo-US discussions, Murthy said, “Instead of focusing on such issues, we should look at how to make his (Obama’s) stay in India a good one, we should extend our hospitality, which we are known for.”

The US had recently increased H1-B and L1 visas fee, thus hiking operational costs for Indian IT companies, which send a large number of professionals on working visas to the US.

Obama had also stepped up the campaign against outsourcing, giving jitters to the Indian IT industry, whose earnings are heavily dependent on the American market.

Source:http://economictimes.indiatimes.com/news/politics/nation/Extend-Indian-hospitality-to-Obama-Narayana-Murthy/articleshow/6845704.cms

Prior to US President Barrack Obama’s visit, there has been plenty of controversy over protectionism creeping with the US taking a tough stand on outsourcing jobs to India, reports CNBC-TV18.

In fact Obama is not even going to technology hubs Bangalore or even Hyderabad for that matter, which his predecessor George W Bush visited back in 2006. But here are a few prominent voices saying this is all election rhetoric, and that they expect India and the US to work together to create jobs in both countries

Thomas L Friedman, Author says, “Outsourcing always comes up around election and as soon as election is over it tends to disappear. So I don’t see much, the number of American jobs percentage wise that are outsourced are very minimal. Most things that were sourced in the past are by technology, not by individual.

Sam Pitroda, Chairman, National Knowledge Commission says, “Outsourcing is not the only job, there are lots of other jobs. Everyone’s focus in the US is on job creation. To create jobs you need to retain people, I think India can help in retaining. So there are lots of opportunities if you really sit down and plan properly which would be beneficial to both sides. But you have got to think forward and not backward.”

Rajat Gupta, Former MD, McKinsey & Co says, “If you think about US challenge its about innovation, spending and building up consumer confidence amongst companies that demand will come back and create jobs. I think we can help each other in truly creating jobs. I think Indian companies can create jobs in the US and US companies can create jobs in India and it would be a win-win situation. So I hope that will be right on the agenda.”

Source:http://www.moneycontrol.com/news/business/obamas-india-visit-ignoring-it-hubs-only-election-rhetoric_495662.html

US President Barack Obama’s visit to India in November puts the spotlight on its $60-billion IT sector. Concern has been growing in the US that Indian firms are taking away technology jobs from Americans.

India argues it is a creator of jobs in the United States and should not be blamed for high unemployment.

The President of India’s National Association of Software and Services Companies says India is actually part of the solution and not the problem.

[Som Mittal, President, National Assoc. of Software & Services]:
“When we buy goods we create jobs there and even when we do work for American companies it makes them more competitive. So, we are actually helping him save jobs and create jobs back in America. So, I think that perception needs to be cleared.”

An increase in US visa fees, a ban on off-shoring by the state of Ohio and the industry’s portrayal in campaign ads as a drain of US jobs, has set a frosty tone ahead of Obama’s visit to India.

High unemployment rates have put pressure on Washington to protect domestic jobs.

This week, the White House said that a key message from Obama during his visit would be “to make sure there’s opportunities for US jobs, US exports.”

India’s outsourcing sector, which accounts for 5% of the country’s economic output, depends on US business for around 70% of its revenue.

Outsourcers say they enable clients to innovate and compete, providing skills not readily available in the United States.

Outsourcing work to a lower-cost U.S. site can save roughly 20-25%, while moving work to India can save 70 to 80%.

Source:-http://english.ntdtv.com/ntdtv_en/ns_asia/2010-10-29/782083559371.html

The White House has revealed how President Barack Obama will address the sensitive issue of outsourcing when he undertakes his visit to India between November 6 and 9.

The basic message, it appears, will be that the outsourcing of U.S. jobs that has resulted in Indians doing customer support and software services for myriad U.

S. corporations, is part of a broader economic tradeoff with India.

The US in return will gain access to a vast market with a fast-growing middle class and a huge amount of inbound Indian investment that is creating jobs at home, the president’s aides said.

While the outsourcing dynamic is one aspect of the U.S.-India commercial relationship, “India is also a tremendous market, potential market, for U.S. exports and a source of investment back in the U.S. And so it’s more than a uni-dimensional relationship,” said Mike Froman, Deputy National Security Advisor for International Economic Affairs.

Froman trotted out some figures to back up the point that the U.S. trade relationship with India isn’t a one-way street.

U.S. goods exports to India have quadrupled to 17 billion dollars over the last seven years and services exports have tripled to about 10 billion dollars.

“With 1.2 billion people and an economy…expected to grow at 8 percent a year for the next several years, we really see India as a potentially very important market for U.S. exports,” Froman told reporters, according to a transcript of his remarks.

Froman said Indian companies now support 57,000 jobs in the U.S. He also noted that Indian companies are the second-fastest-growing investors in the U.S., behind only the U.A.E.

“So it’s a fast growing economic relationship,” he said.

The White House hopes to be able to announce some big commercial deals in defense, aviation and other sectors during Obama’s visit to underscore its point.

Source:http://www.newstrackindia.com/newsdetails/187562

Issues facing India’s outsourcing industry, such as an increase in U.S. visa fees, will figure in intergovernmental talks during U.S. President Barack Obama’s visit to the country in early November, India’s minister of state for communications and information technology, Sachin Pilot, said Thursday in Bangalore on the sidelines of an event.

Indian outsourcers should also reduce their dependence on a single market and diversify to other markets worldwide, Pilot said during a speech at an IT event hosted by the local state government. The U.S. accounted for 63 percent of the revenue of Indian outsourcers, he added. India should attempt to repeat its success in software outsourcing in the area of hardware manufacturing as well, while also focusing on niche software services, Pilot said.

Indian outsourcers are, however, worried because U.S. unemployment and generating jobs in the country are key issues in next Tuesday’s midterm elections.

Indian outsourcers have been disturbed by recent moves in the U.S. including an executive order by Ohio Governor Ted Strickland that banned the expenditure of public funds for offshore purposes.

Earlier, Obama signed into law a US$600 million bill for increased surveillance of the U.S.-Mexican border to prevent illegal immigrants. The funds for these measures are to be raised from an increase in visa fees paid by tech workers brought into the country by companies with more than 50 staff, and in which more than 50 percent of the staff are on such visas.

At a White House media briefing on Wednesday in connection with Obama’s India visit, officials tried to soften the outsourcing issue, emphasizing instead that Indian investment already supports 57,000 jobs in the U.S.

Large Indian outsourcers such as Tata Consultancy Services and Infosys Technologies have reported double-digit revenue growth in the quarter that ended Sept. 30, indicating that business in the U.S., their key market, is growing.

Infosys Technologies CEO S. Gopalakrishnan said Thursday at a speech at the event that the IT and BPO (business process outsourcing) industries in India would this year surpass earlier growth forecasts of between 13 percent and 15 percent. The industry grew by 5 percent last year.

Indian outsourcers have tried after the recession to increase revenue from Europe and other markets and to reduce their exposure to the U.S. market. But the austerity measures in some European countries are expected to slow down the transition, according to analysts.

During his trip to India, Obama is not scheduled to visit Bangalore, which is considered to be the outsourcing hub of India.

Source:http://www.pcworld.com/businesscenter/article/209102/india_to_raise_issue_of_outsourcing_curbs_with_obama.html

It seems all concerned parties want to ensure that America President Barack Obama’s trip to India next month is not marked by any ill will.

Ahead of the four-day trip, senior US officials assured a group of Indian MPs that protectionist measures taken by the Obama government in the outsourcing industry were only temporary and not a permanent policy at Washington.

Last week, in an interaction with six parliamentarians, US Assistant Secretary of State Robert Blake and US Ambassador to India Tmothy J Romer said that US was unlikely to persist with protectionist measures once its economy begins to look up.

“We raised the issue of outsourcing and the steep hike in H1B visa application fee,” said Rashtriya Lok Dal MP Jayant Chaudhry. He said that while they got no assurance about visa fees, on the BPO front they were told that the protectionist measures wouldn’t last forever”

Source:http://www.bangaloremirror.com/index.aspx?page=article&sectid=11&contentid=2010102620101026230711436b0d709a9

The Indian IT industry will raise issues related to outsourcing and immigration with US President Barack Obama during his visit to India next month, Infosys Technologies’ chief executive S. Gopalakrishnan said Tuesday.

‘We are waiting for confirmation of our meeting with Obama. As an industry association (Nasscom), we will put forward our views across to Obama on outsourcing of IT services and the recent hike in US visa fee for our software professionals,’ Gopalakrishnan told reporters here on the margins of a conference.

Admitting that the new US immigration policy was worrying the Indian IT industry, Gopalakrishnan said though the US Border Security Bill had nothing to do with immigration, it has had an impact on the cost of IT services firms.

‘We will also clarify to Obama that most of the job losses in the US are not arising because of outsourcing IT services to India. They are resulting in other sectors such as construction, retail, which is moving to online shops, and the rest of manufacturing moving out of the country,’ Gopalakrishnan said.

Clarifying that the industry view on outsourcing was based on the statistics of the US state department of labour, the chief executive said India Inc. would highlight these facts and seek Obama’s support to make sure the sentiment was not negative.

‘We will highlight this and request support from Obama to make sure at least the sentiment is not negative. Right now the sentiment is also negative. I expect this to be addressed. It will be part of our discussions with the (US) president,’ Gopalakrishnan said.

He was speaking to reporters after delivering an address on ‘India: Knowledge and Professional Services Hub to the World – The Next Decade’ at the conference organised by the All India Management Association (AIMA).

Noting that significant opportunities existed between India and the US to increase trade, Gopalakrishnan said the support of the US president and Prime Minister Manmohan Singh was very important.

‘Support from the top is very important to move up the trade and economic ties between the largest democracy (India) and the oldest democracy (US). Opportunities are there to look out in higher education and advance research. We expect some support from the heads of the state,’ Gopalakrishnan said.

Referring to the uncertainty at the macro-economic level, Gopalakrishnan said Europe had been slow in recovery as evident from the recent quarterly results of some leading European firms.

‘In contrast, US firms have done better from growth perspective. Confidence level in Europe is lower as recovery has been slow. Currency volatility is another cause for concern though the euro has picked up. Business sentiment is still negative in Europe than in the US,’ he added.

In light of the uncertainty at the macro level and higher unemployment rate in the US, the top official said technology spending in the US in 2011 was going to be similar or slightly better than in 2010.

‘I expect IT budgets to be flatter or slightly up. Our way of going up the value chain is to take increasing share of the tech spending, as global outsourcing gets larger share of the pie,’ Gopalakrishnan added.

Source:http://calcuttatube.com/indian-it-industry-to-raise-outsourcing-and-immigration-issue-with-obama/128037/

Infosys mentor N R Narayana Murthy on Monday said there was no need for Indian IT industry to be apolgetic or shy about US outsourcing curbs during President Barack Obama’s visit to the country next month.

Instead, Murthy said, Obama would be an honoured guest and be treated in the typical Indian tradition and philosophy of “athithi devo bhavo” (a guest is like God), without any expectations from him.

“Indian IT corporations have made work in the US much more efficient by enhancing their productivity and quality of work. We have helped to add sufficient value to the corporations in the US. Therefore, there is no need to be apologetic, when Obama visits India. There is no need for us to be shy either”.

On persistent questions from reporters on whether the IT industry would raise the outsourcing issue during Obama’s visit, Murthy said, “There is no doubt at all that we are adding significant value to the corporate sector all over the world, including the US.”

The US has recently increased the fee for H1-B and L1 visas and Obama had stepped up campaign against outsourcing causing major concerns in the Indian IT industry, whose earnings are heavily dependent on the American market.

On IT industry’s expectations from the US president’s visit, Murthy said, “Obama is a guest and in India when a guest comes we treat them with respect, we are happy that they have come and you don’t expect anything from them.

“Wherever he is going, he would be an honoured guest. Our culture says athithi devo bhavo (a guest is like god). He is our beloved guest I am sure people will treat him with utmost respect and ensure he enjoys his stay”

On whether there was any disappointment over the US President skipping Bangalore on his itenary, he said, “I understand he is a world figure. He only has so much time.. we understand that”

He went on to point out that even Obama’s predecessor Bill Clinton could not make a visit to Bangalore during his India visit.

Source:http://economictimes.indiatimes.com/tech/ites/Dont-be-apologetic-on-outsourcing-during-Obama-visit-Murthy/articleshow/6809959.cms

President Obama’s visit to India in November 2010 should further strengthen the Indo-US strategic partnership. High level visits from both sides have taken place to prepare for the visit. The US has pulled out all stops to convey that India is its valued partner and the partnership is a global partnership for the 21st century. President Obama has described India as an ‘indispensable partner’ while India has described the US as a ‘natural’ ally.

Why is the US seeking out India for special treatment as was reflected, for instance, in the signing of the Indo-US nuclear deal? Several explanations can be given. But one of the most enduring if unstated assumptions – is that the US is indulging in a balance of power game in view of the rise of China. It wants to build a strong strategic partnership with India to balance China’s rise. However, this is only partially true, because the US is also building its relations with China, even though it remains concerned about its rise.

The US has realised that India is helping build the US economy, the rhetoric about ‘outsourcing’ notwithstanding. Indian investments in the US are increasing rapidly and creating jobs. According to some estimates by business chambers, Indian investment in the US has created 300,000 jobs in the US, many of them during the recession years.

There are a whole lot of impressive statistics to show that Indo-US relations are developing rapidly. Bilateral trade is growing at 20 percent per annum and has reached $44 billion. It has tripled since President Clinton’s visit in 2000. Trade in services is almost fifty percent of the total trade. India exported $22 billion worth of services to the US in 2008 and imported $10 billion. This is, by all standards, an appreciable achievement. India is already the US’s 14th largest trading partner and will soon join the top ten list. A large number of initiatives have been taken in agriculture, health, education, environment and clean technologies to impart solidity to the relationship. If these materialise, India will benefit in its quest for food and energy security.

With impeding cuts in the US defence budget, US defence manufacturers are looking for opportunities in India. Undoubtedly, Indo-US defence cooperation has grown tremendously in the last few years. Over fifty joint exercises have been held. India has already decided to buy $2,5 billion worth of defence equipment including C-130J and P-8I aircraft. Two US companies have bid for the 126 advanced fighter aircraft. New defence deals will create new jobs in the US. However, the defence relationship so far remains a buyer-seller relationship.

The Indo-US civil nuclear deal paves the way for nuclear energy renaissance. US nuclear suppliers are unhappy about the newly passed Indian nuclear liability bill, but the chances are that this problem will be sorted out as India takes a decision on signing the Convention on Supplementary Compensation for Nuclear Damage. If all goes well, India will emerge as a major force in the nuclear energy arena. This will create new, high tech capabilities in India. New jobs will be created here.

In the backdrop of the above developments, can one say with confidence that Obama’s visit will take the partnership to a higher trajectory?

A few years ago, after the US decided to sign the 123 agreement with India, it was said that both countries had finally begun to look at each other independent of Pakistan. But, Pakistan is back in contention. The growing US-Pak relationship has the potential of clouding the Indo-US relationship. US officials insist that India should see the bilateral relationship in a global context, and not through the lens of Afghanistan and Pakistan. India cannot ignore the US contribution towards strengthening the Pakistani army. The infamous hyphenation is back, at least in Indian eyes.

During the recently concluded US-Pakistan strategic talks in Washington, the US announced additional aid of $2 billion to Pakistan over 2012-16. The joint statement issued at the end of the dialogue committed both counties to “cultivating a strategic, comprehensive, and long-term partnership”. The joint statement further said, “The United States and Pakistan renewed their resolve to promoting peace, stability, and transparency throughout the region and to eliminate the threats posed by terrorism and extremism.”

Foreign Minister Qureshi tried his best to persuade Obama to take up the Kashmir issue during his forthcoming trip to the region. He said publicly, “President Obama has always understood the importance of a Kashmir solution. His coming visit to the region is the time to begin to redeem the pledge that he made earlier”. It is interesting that Secretary Clinton wisely did not get drawn into the Kashmir issue publicly despite Qureshi’s urging.

The Indian worry is that Pakistan continues to get sophisticated weapons from the US in the name of counter terrorism. A number of these weapon systems like the F-16s can only be used against India. The US turns a blind eye to India’s protestations. The US has also assured Pakistan that any settlement in Afghanistan will be discussed with Pakistan. Pakistan is wooing the US for a nuclear deal similar to that with India. The US has not yet agreed but who knows when it might yield to Pakistani pressure. Or else, it may decide to overlook the Pak-China nuclear deal in the Nuclear Suppliers Group.

The irony is that US relations with Pakistan are strengthening despite numerous revelations about how Pakistan is playing a double game in Afghanistan and the involvement of Pakistani agencies in the planning and execution of the Mumbai attacks. The US appeasement of Pakistan only shows how desperate the US position is in Afghistan.

China will be the major factor, though unstated, in how US-India relations grow in the future. India will like to have some clarity during President Obama’s visit on US relations with China. Any further indication that the US wants China to play a role in South Asia will not go down well with India, particularly at a time when China has become so assertive vis-à-vis India.

What to expect?

So, what can India expect from President Obama’s visit? Clearly, India has to realise that it will not get all that it wants from the US. Complete convergence of strategic interests between the US and India is unlikely and even unnecessary.

India should not expect that the US will adjust its policies towards Pakistan, Afghistan and China to suit India’s interests. Here there will always be some divergence which cannot be wished away. Such a realisation will help keep expectations at a reasonable level.

Both sides should treat the visit as a process of consolidation of bilateral ties and not expect big ticket items like the Indo-US nuclear deal.

If India can get the US to reform its antiquated entity list, that will open the gates for high technology trade. There are some indications that the US is contemplating the reform of its entity list to give relief to India.

Despite the impressive growth in bilateral trade, the over all volumes of trade and investment are still low. That should change. The trade in high technology should get a fillip.

There is considerable potential in defence cooperation. The US should shed its inhibitions about technology transfer and co-production of high-tech defence items and bring these at par with Indo-Russian defence cooperation. If India really needs high-tech communications equipment, then it will have to look at the US demands for finalisation of the Communications Interoperability Security Memorandum Agreement and BECA more carefully. India will have to realise that the US is unlikely to drop its insistence on these ‘foundation’ agreements. The US has signed these agreements even with Japan and the UK. There will be no exception for India. After all India had to agree to the End User Monitoring Agreement some years ago. The ball is very much in India’s court.

India and the US are both space powers. India’s achievements in space will define its status as a world power. India can join hands with the US in developing key space technologies with potential in civilian areas at least. Perhaps India and the US could think of one big ticket item, such as cooperation on a futuristic project on developing space-based solar power. This could be a part of India’s recently launched solar mission.

If the visit is seen from the Pakistan angle, the goals of Indo-US cooperation will seem half empty. Otherwise it may appear to be half full.

Some tough questions will be raised during the visit. But the President is a consummate charmer. He has a positive image in India. He will no doubt unfold his charm on the Indian public. But, he will have to be mindful of the numerous minefields strewn along the way. His comments on ‘outsourcing’ have disappointed Indian industry. He had made some comments on Kashmir during his election campaign. If the visit is to be a success, he will need to make some amends to mitigate his comments on ‘outsourcing’ and avoid talking about Kashmir. He would need to be sensitive to Indian concerns on Afghanistan and China’s role in South Asia.

Source:http://www.idsa.in/idsacomments/ObamasvisittoIndiaIstheglassofIndoUSstrategicpartnershiphalffullorhalfempty_agupta_251010

Top honchos keen on attending the US president’s business event in Mumbai on November 6 will have to answer intrusive questions on whether they engage in “BPO” or “outsourcing” work for American companies in India.

The US-India Business Council (USIBC), which is one of the hosts of the event, appears to have brought US domestic politics to Indian shores. That may end up clouding probably the best of India-US relationships — of the business communities.

All prospective participants at the daylong presidential event at the Oberoi will have to answer a questionnaire — how much they export to the US, how much they import from the US, how many people do they employ in the US and how many in India. And then, whether they are engaged in BPO or outsourcing work for US companies in India.

India Inc is unhappy and angry. They wanted to have a high-profile networking event with US President Barack Obama. Two premier Indian business organizations, CII and FICCI, are co-hosts of the event and, sources said, have stoutly opposed Indian entrepreneurs having to answer this questionnaire. Finance minister Pranab Mukherjee is listed as a special speaker at the event — it is believed he may address the outsourcing issue.

The USIBC wanted to charge $500-$1,000 for every participant. This went against the grain for Indian business organizations. “We never charge participants either in the US or in India, particularly for head of state events.

This is a matter of prestige,” said senior CII officials. After many arguments, the USIBC has now agreed not to charge members of CII or FICCI. But that is offset by a huge charge for companies that are “sponsors” — they will have to pay $75,000 each, which has led to many complaints from the Indian side.

Outsourcing is a huge Obama bugbear. In the past few years, he has hit out against outsourcing a number of times, with particular reference to India. In an election year, this issue has gained a lot of momentum in a US racked by economic problems. In the past few weeks, Obama has gone on record to say, “We should be using our tax dollars to reward companies that create jobs and businesses within our borders. There is no reason why our tax code should actively reward them for creating jobs overseas.”

The jobs-in-America theme promises to be played out in India during the presidential event. Recently, USIBC president Ron Somers was quoted as saying, “The fact that the president has agreed to address this business summit demonstrates the priority this president places on creating jobs for America by cultivating deeper commercial ties with India, the world’s largest free-market economy. The commercial focus of this visit will unleash jobs and opportunities that will benefit the American economy at a time when jobs are needed.”

Source:http://timesofindia.indiatimes.com/india/Queries-ahead-of-Obama-meet-upset-India-Inc/articleshow/6777563.cms