Reacting to U.S. President Barack Obama’s decision to end tax breaks for companies shipping jobs overseas, the National Association of Software and Service Companies (Nasscom) on Thursday hoped that the U.S. government would not take protectionist measures to stop outsourcing of jobs.
Referring to Mr. Obama’s first State of the Union address, Nasscom Vice-President Ameet Nivsarkar said the industry was worried over indirect protectionism that might hit the Indian information technology and outsourcing industry hard, as over half of India’s $60 billion IT and outsourcing industry revenues come from the U.S.
In his address, Mr. Obama had stressed on creating new jobs and called for encouraging businesses to stay within the U.S. borders.
“It’s time to finally slash the tax breaks for companies that ship our jobs overseas and give those tax breaks to companies that create jobs in the United States of America,” the U.S. President said.
However, Mr. Nivsarkar felt that the real worry was protectionism and not tax breaks. “I do not think tax break issue is really the one which is important for us. Mr. Obama’s comment was not related to outsourcing. It is about the U.S. companies operating in regions where they get tax benefits,” he pointed out.
According to Mr. Nivsarkar, the slashing of tax breaks would hit the American companies more. “The whole issue about taxing companies that were shipping jobs overseas does not relate to the work that is done out of India or other locations. That is really about U.S. subsidiaries which have set up plants overseas,” he added.
Nasscom had been lobbying hard to ensure that the U.S. administration did not take protectionist measures and put curbs on visas to professionals.
Last year after Mr. Obama was elected President, a Nasscom delegation had visited the U.S. and met policymakers and stakeholders in the U.S. Congress and administration to protect the interest of the Indian IT and BPO industry.