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Home > Business > Business Headline > Report

Outsourcing to India will not hit jobs in US: Nasscom

Fakir Chand in Bangalore | June 12, 2003 15:08 IST

National Association of Software and service Companies has categorically declared that outsourcing information technology services to India will not lead to job losses in the US, but make its companies competitive and strong enoughto face the downturn in the global economy.

Amid growing concerns over loss of jobs in the US due to increasing outsourcing by its companies, Nasscom chairman Som Mittal clarified in Bangalore on Thursday that such a strategy would only make US firms more productive and help improve their bottom line.

"In the face of continued global recession, more and more US firms are realising that it makes an enormous economic sense to shift only those jobs or works that require high-tech skills at competitive pricing so as to sustain the downturn and save the companies from going bankrupt," Mittal told about 800 delegates at the Nasscom's two-day India ITES-BPO Strategy Summit 2003.

Allaying fears over jobs being moved away from the US or UK, Mittal cited how the US auto industry had benefited by outsourcing its requirements from other countries and became competitive enough to sustain its growth over the years.

"On the contrary, the US steel industry is still facing downturn because of its protectionist measures and continues to reel under stiff competition from cost-effective products entering the US market.

"This stark difference between the two sectors only goes to prove that such protectionist measures goes against the economy as well as companies," Mittal stated.

The legislative attempts being made to prevent outsourcing of IT services by the US or UK firms was motivated more by political than economic reasons in view of the impending elections in both the countries in the near future, Mittal observed.

At a time when the industry is facing economic depression worldwide and competition from low-cost but high-skilled productive countries, it is natural that noises about job backlash are directed against India, which has begun to not only dominate, but also excel in software services, including IT-enabled and BPO services.

"But we believe that once the economy is on an upswing, apprehensions over outsourcing would recede, as it would only add value to their business and benefit the US economy," Mittal asserted.

Assuring the Indian IT industry that there would be no immediate impact on attempts to prevent outsourcing, Mittal said the New Jersey bill was likely to undergo amendments.

"Though the other proposed legislations in states like Maryland, Washington, and Connecticut are on hold and are unlikely to be introduced, Nasscom was working not only with US Senators and Congressmen, but also with the IT associations in the US to highlight the benefits of outsourcing from India," Mittal affirmed.

On the visa issue, Mittal said the latest US measures to regulate the inflow of professionals from other countries was in line with its security concerns in the wake of 9/11 and political compulsions due to the growing unemployment rate and continued slowdown in the US economy.

"Though the US Natural Immigration Services has allocated a quota of 195,000 H1B visas between September 2002 and October 2003, so far only 110,000 such visas have been issued, there is no cause for concern over the next year's quota," Mittal added.

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