Bangalore ready to brace Obama shock over outsourcing

Forty-eight hours after US President Barack Obama’s ‘bite’ on outsourcing to Bangalore, the City remains cool about maintaining its supremacy in the IT sector.

Yes, there are concerns about some job losses if the US multinationals are deterred from doing business here once Obama’s proposal is made into law, but overall, Bangalore is confident of weathering the storm.

In the air-conditioned comforts of some of the City’s BPOs, suddenly not all chats over coffee are about movies or other entertainment. The discussion has veered round to the probable impact of Obamanomics. Would the US President’s proposals pass into law?

Does the spectre of liquidation, job losses and salary cuts loom large over the India’s technology capital? Is it doomsday for India’s much-vaunted IT industry?

These are some of the questions that young BPO employees have been asking each other since Tuesday. “It will have an impact on the jobs here. Why will companies come forward if they end up paying more tax?” an employee of an American subsidiary said on conditions of anonymity. But there were those like Aditya Sanjit, formerly a Fidelity India employee currently employed with an Indian software firm, who believes that the impact of Obama’s tax proposals on the Indian IT industry in general and outsourcing in particular would be minimal. “This has more to do with US firms than outsourcing or offshoring. And we are just over-reacting,” he said, adding that “the companies cannot afford to pull out as India will still remain a major outsourcing spot.”

Chief Minister B S Yeddyurappa said “Obama’s announcement will have only marginal impact on third-party IT vendors. If there are any changes, they may result in higher tax payouts for US companies.”

But the CM was also of the view that outsourcing has been a lesson for Karnataka in the sense that “one should not depend too much on one element of globalisation; we should try to be self-sustaining”. Once the dust settles down, it may yet be “yes” to Bangalore, if not “no” to Buffalo. The world, in Thomas Friedman’s words, may still remain flat.