Obama slates outsourcing

US President Barack Obama once again targeted outsourcing of jobs overseas by American companies, increasing the pressure on local firms in an attempt to secure some benefit ahead of the crucial November elections, reports The Times of India.

Obama, speaking at a rally in Parma, Ohio, the state that banned outsourcing of work overseas by government departments, said he remained firm on ending tax breaks for American firms that sent jobs abroad.

“One of the keys to job creation is to encourage companies to invest more in the US. But for years, our tax code has actually given billions of dollars in tax breaks that encourage companies to create jobs and profits in other countries,” Obama said, flanked by Ohio's governor Ted Strickland, who is trailing in the polls and is fighting to retain his governorship.

Ahead of the US visit by a Nasscom delegation this month, its president Som Mittal says the visa fee hike and Ohio's ban on outsourcing is "disturbing", with long-term implications, writes NDTV.

"I think this is a disturbing trend. The measures that India is taking would bring to the notice of the US administration that for short-term gain, there could be long-term implications," Mittal said on the sidelines of a CII event in New Delhi.

Additional secretary in the commerce ministry DK Mittal, who was also present, said: "We are going to talk to the US and convince them that this is not something which they should be doing".

Two leading Indian IT outsourcing companies said customers were still spending on technology but the mood remained cautious and short-term as firms wait to see how the global recovery plays out, says Reuters.

"Demand continues to be okay," said S Gopalakrishnan, chief executive of Infosys Technologies, India's number two IT outsourcing firm, at the World Economic Forum in China. "What is challenging is that companies are willing to commit for the short term but not the long term or the medium term. Because of that it becomes challenging to do medium- to long-term planning."

Martha Bejar, president of global sales and operations at Wipro, the number three IT outsourcing firm in India, says IT budgets were flat to slightly higher as customers focus on projects to bring long-term changes to their operations.