Obama does a back flip on outsourcing; IT/BPO industry relieved

As US President Barack Obama mellowed down his  anti-outsourcing stance at his joint press conference with Prime Minister Manmohan Singh, the Indian software industry heaved a sigh of relief.

Som Mittal, chief of India's powerful National Association of Software and Services Companies (NASSCOM) — an umbrella body of information technology and business process outsourcing (BPO) firms — said the apparent change in the president's attitude was more than welcome.

"It is a good result from the [president's] visit," said Mittal, speaking shortly after Obama and Manmohan Singh held a joint press conference.

At the press conference, Obama emphasised that trade in goods and services between the two countries is not a "one-way street" of American jobs and companies moving to India.

Unlike his 'Buffalo, not Bangalore' election rhetoric, Obama was eager to point out that even as some jobs left the US for India, other jobs were getting created there because of India.

"Whenever I'm asked about Indians taking away our jobs, I want to say: You know what, they've just created 50,000 jobs," he said, a reference to the $10-15 billion worth of business deals entered into by Indian firms and the government with US firms over the past few months.

The comments were in line with the position taken by Obama during his interaction with Indian industry leaders in Mumbai, where he called India a victim of a stereotype as the land of call centres and back offices that took away US jobs.

Prime Minister Singh, too, pointed out that shipping low-end jobs to India helped US firms make more profits, which in turn helped
them to create new, high-end jobs in the US.

Obama had recently increased visa fees for highly skilled workers on temporary posting in the US — costing Indian IT companies hundreds of millions of dollars collectively. But NASSCOM's Mittal was ready to let bygones be bygones if Obama stuck to his present stand.

"It has become an act, and we can live with it," he said.

Mittal said he did not expect opposition to services imports to disappear from the US but hoped that Obama's 'conversion' would make a difference in the official stand.

"We hope the rhetoric will lessen, but we have to wait and see the actual impact," he cautioned.