No Tax Breaks for US Firms That Outsource Their Jobs Abroad: Obama

By Angsuman Chakraborty, Gaea News Network
Wednesday, February 25, 2009

US president Barack Obama has bad news for Indian IT and BPO industry. Its as simple as that. In his speech to US Congress about economic stimulus and financial recovery, he made it clear that there will be no tax breaks for the US companies that outsource their jobs abroad. This means, the US companies will be discouraged from outsourcing their work to India and other South Asian countries. Obama also said that his Stimulus deal will create and save 3.5 million jobs. Obama declared that he had already found US$2 trillion in savings. SO this option is likely to stay for now.

We are  investigating and trying to talk to some of the top heads of Indian IT industry to understand how grave the situation actually will be. The country’s US $50 billion IT sector exports around 90 percent of its output to the US. Though India wasn’t expecting something like this at this point of time, but it has happened. and we will have to see how the markets react.

M.K. Pandhe, the president of Centre of Indian Trade Unions told Frontline that,

The IT sector may get affected further after the U.S.’ decision to reduce outsourcing. We have learnt that many IT companies have already announced cancellation of job interviews.

We will keep you posted. Bookmark it.


February 22, 2010: 4:21 am

It is just a sad thing that they will have to do that, especially that there are many jobs will be loss overseas because they will cut outsourcing.

November 22, 2009: 6:08 pm

The outsourcing crisis in our country is one that has been in affect for years. I Find it irronic that people used to look down upon goods made in foreign countries such as China and Japan, but now those same goods are only manufactured in those countries. Despite the ironic nature of the situation I do believe it is an issue that policy makers must adress in order to ensure our nations stability.

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