Indian IT majors fume at Ohio's outsourcing ban

New Delhi/ Chennai:  After President Obama's anti-outsourcing noises comes a big blow for the Indian IT industry.  The state of Ohio  has banned outsourcing government IT projects to offshore destinations such as India.

"The purchase of offshore services with public funds undermines economic development and other job creation and retention objectives," said Ted Strickland, the Governor of Ohio.

Tata Consultancy Services (TCS), India's largest IT services firm, runs a project in Ohio, that employs over 300 people. Indian IT majors reacted sharply, amidst fears that other states may follow suit, in an effort to create local jobs.

Kris Gopalakrishnan,  the Chief Executive Officer of Infosys says, "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."

The National Association of Software and Services Companies (Nasscom) belives political compulsions have led to the move.  "Ohio state's proposed ban on outsourcing of government IT projects comes at a time when the November elections to the United State Congress and Ohio governorship are drawing nearer. The ban can only be viewed as counterproductive to the US government thrust on reducing public deficit and possibly lead to an increased tax burden on its citizens," said Nasscom in a statement.

Just 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.

But the biggest worry in Washington and across America seems to be the jobless nature of the economic recovery, one which has seen unemployment levels touch almost 10 percent. 

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Tags: indian bpo, Infosys, Kris Gopalakrishnan, Nasscom, Ohio, outsourcing ban