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Home > Business > Business Headline > Report

Outsourcing curbs not to hurt domestic IT firms


BS Corporate Bureau in New Delhi | March 06, 2003 12:15 IST

The attempts by US politicians to limit outsourcing of government-related work to India will not affect Indian software companies because US government-related work constitutes little over 1 per cent of the country's software exports.

According to National Association of Software and Service Companies, firms in the US have made substantial savings as a result of outsourcing to India.

"Such a move will not have any impact on the software services exports segment. The exposure to public sector-related business is very low," said Kiran Karnik, president, Nasscom.

The Indian software sector does not expect the business from private sector in the US to be impacted by this.

It is likely that the banking and the US financial sector companies itself have made a saving of about $8 billion in the last four years from outsourcing to India.

Besides, Nasscom is also taking a number of steps to counter the anti-offshore trend in various states in the US.

The software industry association is holding meetings with key policy makers in USA in various states and the federal governments. Nasscom is also launching a public relations campaign with specific media in the US.

In addition, Nasscom is also engaging with a prominent think tank to conduct joint research to demonstrate the economic benefits of outsourcing which will highlight how outsourcing creates new jobs, benefits to the US savings rate and how outsourcing provides a better prices and services to US consumers.

Software services companies are also not anticipating any impact on the industry as a result of the sentiment against outsourcing to India.

Hughes Software Services said that the company does not expect any kind of impact on the company and the country's software sector due to any such move.

"We do not anticipate any backlash on the Indian software sector as a result of any such move. We think that business would continue as usual," says Arun Kumar, chairman and chief executive officer, Hughes Software Services.

Even the ITES companies, expect that the business would continue as normal even if such a law would come into place.

According to Rakesh Kumar, president and country head, GlobalVantedge, "My belief that there would be no impact."

"It looks like a move from the part of politicians. At the end of the day, the extremely commercially savvy US corporate would do only what helps their businesses," Kumar added.


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