Indian IT industry to raise outsourcing issue with Obama

BANGALORE - The Indian IT industry will raise issues related to outsourcing and immigration with US President Barack Obama during his visit to India next month, Infosys Technologies’ chief executive S. Gopalakrishnan said Tuesday.

“We are waiting for confirmation of our meeting with Obama. As an industry association (Nasscom), we will put forward our views across to Obama on outsourcing of IT services and the recent hike in US visa fee for our software professionals,” Gopalakrishnan told reporters here on the margins of a conference.

Admitting that the new US immigration policy was worrying the Indian IT industry, Gopalakrishnan said though the US Border Security Bill had nothing to do with immigration, it has had an impact on the cost of IT services firms.

“We will also clarify to Obama that most of the job losses in the US are not arising because of outsourcing IT services to India. They are resulting in other sectors such as construction, retail, which is moving to online shops, and the rest of manufacturing moving out of the country,” Gopalakrishnan said.

Clarifying that the industry view on outsourcing was based on the statistics of the US state department of labour, the chief executive said India Inc. would highlight these facts and seek Obama’s support to make sure the sentiment was not negative.

“We will highlight this and request support from Obama to make sure at least the sentiment is not negative. Right now the sentiment is also negative. I expect this to be addressed. It will be part of our discussions with the (US) president,” Gopalakrishnan said.

He was speaking to reporters after delivering an address on “India: Knowledge and Professional Services Hub to the World - The Next Decade” at the conference organised by the All India Management Association (AIMA).

Noting that significant opportunities existed between India and the US to increase trade, Gopalakrishnan said the support of the US president and Prime Minister Manmohan Singh was very important.

“Support from the top is very important to move up the trade and economic ties between the largest democracy (India) and the oldest democracy (US). Opportunities are there to look out in higher education and advance research. We expect some support from the heads of the state,” Gopalakrishnan said.

Referring to the uncertainty at the macro-economic level, Gopalakrishnan said Europe had been slow in recovery as evident from the recent quarterly results of some leading European firms.

“In contrast, US firms have done better from growth perspective. Confidence level in Europe is lower as recovery has been slow. Currency volatility is another cause for concern though the euro has picked up. Business sentiment is still negative in Europe than in the US,” he added.

In light of the uncertainty at the macro level and higher unemployment rate in the US, the top official said technology spending in the US in 2011 was going to be similar or slightly better than in 2010.

“I expect IT budgets to be flatter or slightly up. Our way of going up the value chain is to take increasing share of the tech spending, as global outsourcing gets larger share of the pie,” Gopalakrishnan added.