JOIN USUnion Commerce and Industry Minister Anand Sharma expressed hope that the US Administration's proposal to end tax incentives on outsourcing companies will not impact the growing bilateral trade relations between the two nations.
Addressing the 21st Nasscom India Leadership Forum summit, Sharma said: "We will have to look at the details as to what is being proposed by them (the US). We hope that nothing will be done by the US government that will adversely impact the ongoing partnership, particularly in the technology sector.”
Further, he said, "Without getting into specifics, I would say that in today's time what is expected from governments, nations and leaders is to bring down the existing barriers and not to add new barriers of protectionism that will be counter-productive for the global economy, as they deepen the recession and delay the recovery."
On the impact of the proposed measures on the IT sector, which derives nearly half its income from the American markets, Sharma said, "We have conveyed our concerns very clearly to the US and we shall continue to do what is expected of us to ensure that our IT industry grows from strength to strength, and also the movement of professionals and their right to go and work wherever companies are located, is fully respected."
It may be noted that US President Barack Obama on Tuesday in his steely resolve to bring back historically high unemployment in a weak economy, stated: “The American people deserve a tax code that helps small businesses spend less time filling out complicated forms, and more time expanding and hiring."
He added: A tax code that lowers incentives to move jobs overseas, and lowers tax rates for businesses and manufacturers that are creating jobs right here in the United States of America. That's what tax reform can deliver. That's what we can do together."
In fact, US shares 59 per cent of the total outsourcing business with India and the largest chunk of the outsourcing business is in the IT sector, while manufacturing industries constitute 9 per cent of the total revenues generated from the outsourcing boom in India.
Sharma further said at Nasscom summit: "We must allow professionals to meaning fully engage with companies. Historically protectionism has always been counter-productive. Artificial barriers in today's time when the global economy is challenged, only delay the recovery process. To ensure there is economic activity, trade and movement of people it is sensible to step out and engage more to bring about change.”
He pointed out that enhanced economic engagement, investments and manufacturing are the way forward for nations to grow and not protectionism. On concerns with European Union in the forthcoming FTA, he felt the government will not accept anything if India is not accepted as a data-secure and data-adequate country.