The American state of Ohio has imposed a ban on outsourcing of government IT projects to offshore destinations such as India. TCS, India's largest IT company, runs a project in Ohio.
The move is likely to affect Indian companies that derive more than 50 per cent of their revenues from the US, though not necessarily from the government sector. Many Indian companies have shifted their priority to the government sector in the wake of recession and this move is likely to throw a spanner in their new strategy.
Kris Gopalakrishnan, CEO of India's second largest IT company Infosys, said that the company was concerned by the move. "This is raising a protectionist barrier. All governments tend to be worried about unemployment. Unemployment has not gone up. We need to look at a global perspective. We are working with governments. We must increase local recruitment. There has to be a balance," he said in a statement to NDTV.
Unemployment has hit a record 9.6 per cent in the US leading to rising concerns about the pace of recovery in the world's largest economy.
Only last month, US President Barack Obama signed into law a new Border Security Bill proposing a steep hike in some categories of H-1B and L-1 visa fees. The Indian government had threatened to take the US to the World Trade Organization (WTO) over the new law saying it targeted Indian companies unfairly.
Reacting to the latest development, Minister of State for Parliamentary affairs V. Narayanasamy said that, "As far as WTO talks are concerned, we can't say anything since negotiations are on. But we have our own strengths. All these things are minor irritants. The prime minister is seized of the matter."
Source http://profit.ndtv.com/news/show/ohio-bans-outsourcing-indian-companies-to-be-hit-96583?trendingnow
The move is likely to affect Indian companies that derive more than 50 per cent of their revenues from the US, though not necessarily from the government sector. Many Indian companies have shifted their priority to the government sector in the wake of recession and this move is likely to throw a spanner in their new strategy.
Kris Gopalakrishnan, CEO of India's second largest IT company Infosys, said that the company was concerned by the move. "This is raising a protectionist barrier. All governments tend to be worried about unemployment. Unemployment has not gone up. We need to look at a global perspective. We are working with governments. We must increase local recruitment. There has to be a balance," he said in a statement to NDTV.
Unemployment has hit a record 9.6 per cent in the US leading to rising concerns about the pace of recovery in the world's largest economy.
Only last month, US President Barack Obama signed into law a new Border Security Bill proposing a steep hike in some categories of H-1B and L-1 visa fees. The Indian government had threatened to take the US to the World Trade Organization (WTO) over the new law saying it targeted Indian companies unfairly.
Reacting to the latest development, Minister of State for Parliamentary affairs V. Narayanasamy said that, "As far as WTO talks are concerned, we can't say anything since negotiations are on. But we have our own strengths. All these things are minor irritants. The prime minister is seized of the matter."
Source http://profit.ndtv.com/news/show/ohio-bans-outsourcing-indian-companies-to-be-hit-96583?trendingnow
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