Pranab terms anti-outsourcing moves as unacceptable, self-defeating

Finance Minister Pranab Mukherjee has warned against possible protectionist moves in the US, terming such measures as self-defeating and unacceptable.

"Protectionism ultimately does not help the country that resorts to protectionism. There is no denying the fact that despite some aberrations, uninterrupted flow of goods and services and removal of tariff and non-tariff barriers have yielded results for all... Therefore, I do believe there is merit in giving up protectionism and I do hope that countries will not resort to it," Mr Mukherjee said.

Mr Mukherjee was speaking at the end of his two-day visit to Chicago aimed at wooing US investment to India. His comments assume significance in the backdrop of the comments against outsourcing made by US President Barack Obama last week.

In his State Of the Union Address in Washington, Barack Obama had said that those companies who preserve jobs in the US will get a bigger tax break but those outsourcing jobs will have to pay more.

 
"If you are an American manufacturer, you should get a bigger tax cut. If you're a high-tech manufacturer, we should double the tax deduction you get for making products here. And if you want to relocate in a community that was hit hard when a factory left town, you should get help financing a new plant, equipment, or training for new workers," the US President said.

My message is simple.  It's time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America. Send me these tax reforms, and I'll sign them right away," he had said.

Over the last few months there have been a string of setbacks for Indo-US economic relations from the government’s decision to suspend foreign direct investment (FDI) in multi-brand retail, and the US industry’s disappointment with India’s nuclear liability norms.

The finance Minister also clarified that India was under no pressure to join sanctions against the import of crude oil from Iran imposed by the US and Europe over Iran's alleged nuclear programme.

"It is not possible for India to take any decision to reduce the import of oil from Iran because, after all, the countries that can provide the requirements of emerging countries…Iran is one of them. Moreover, they are supplying not just to India but also to other countries too,” Mr Mukherjee said.

 
The finance minister also sought to dispel apprehensions that suspension of reforms in retail FDI will hit India's image as an attractive destination for investment. He told business leaders and American investors that the decision to put on hold FDI in multi-brand retail is just on hold for now forced by the compulsions of coalition politics.

Tags: Finance Minister, outsourcing, Pranab Mukherjee, Protectionism, US