US doing no favor by outsourcing jobs: Nath

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New Delhi: Union Minister of Road Transport and Highways Kamal Nath on September 9 reacted strongly to US President Barack Obama’s statements and US policies to protect American jobs.

“US is not doing any favor by outsourcing work. This is an economic issue,” said Nath after Obama on September 8 announced tax cuts only for companies which create jobs in the US.

But the Indian IT Industry is worried over America’s stand on outsourcing. The state of Ohio has already banned outsourcing work by government departments, which only affects Wipro in India at the moment.

Infosys Technologies’ HR head Mohandas Pai said that Prime Minster Manmohan Singh must be strong in raising the issue with Obama when he visits India in November.

“Obama is coming to India. We want the Prime Minister to stand up and tell Obama very clearly that open trade is the way to go because we are told that when Obama comes, India is going to offer $ 10 billion of nuclear business to American companies. India is a buyer today of defense goods so we have a leverage and we must use this leverage. If we keep quite and act weak they are going to ride roughshod over our head,” said Pai.

However, Confederation of Indian Industries National Council member Ganesh Natarajan dismissed Obama’s announcement as not a big deal.

“It (tax breaks for US companies) will encourage both multinational as well as Indian companies to do research and innovation. The tax break he is talking about is something different. I think they are discouraging movement of jobs overseas but this new announcement just reiterates the fact that if there is innovation, there is new job creation, it will give benefit. I think we should take advantage of it, not everything is negative,” said Natarajan.

Meanwhile, US State Department spokesman P.J. Crowley said the two countries may have differences even as they forge a strategic partnership, but they have an effective dialogue to resolve them.

“We do have an ongoing strategic dialogue with India. We do believe earnestly that the world’s oldest democracy and the world’s largest democracy have a great deal in common. And in fact, India can be, as the Secretary said in her remarks today, developing new partners who are able to assume greater responsibility for critical issues in the future. Certainly, from a bilateral standpoint, we will have issues that crop up from time to time,” said Crowley.

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