India\'s Outsourcing Industry Welcomes Obama Win

Vivek Prakash/ReutersThe office of an information technology company in Mumbai, Maharashtra, in this March 19, 2012 file photo.

Even though President Barack Obama railed against outsourcing in his campaign, information technology titans and trade groups in India warmly welcomed his re-election, as they were optimistic that he would cement bilateral ties and improve the United States economy in his second term, which in turn would improve their business.

Outsourcing is a controversial topic in the United States, and in a political campaign it can be downright poisonous, as it was in this election. Bain Capital, the private equity firm that Mitt Romney once led, was criticized by President Obama for investing in companies that moved jobs overseas, and one of Mr. Obama's campaign ads nicknamed Mr. Romney the “Outsourcer in Chief.”

In his victory speech, Mr. Obama brought up his plans to ensure American children grow up in a country that attracts jobs by investing in technology - “a country that lives up to its legacy as the global leader in technology and discovery and innovation, with all the good jobs and new businesses that follow.”

Most outsourcing industry leaders in India said they believed that much of Mr. Obama's criticism of outsourcing was campaign rhetoric, and that it would not actually affect his policy decisions.

“In the last four years, his policies have been pro-business,” Ameet Nivsarkar, vice president global trade development for the National Association of Software and Services Companies, or Nasscom, Indi a's technology industry association, said in an interview. “There have been no decisions that are substantially challenging for the industry.”

While other countries like the Philippines and Costa Rica have recently attracted outsourcing business, the Indian outsourcing industry is still growing fast. Revenues for India's information technology and outsourcing industries are expected to cross $100 billion this financial year, up almost 15 percent from a year ago and double the revenues in 2007, Nasscom said in a  report released earlier this year.

Analysts said the United States is a significant driver of growth for the Indian outsourcing industry. “It's clearly the largest partner,” said Mohit Ralhan, managing partner of Indus Balaji Private Equity.

Indian business leaders and policy experts on Wednesday underscored the importance of a strong economic recovery in the United States because of the global impact it would have on countries including In dia.

“Now the focus will be on driving economic growth, which will lead to increased prosperity and greater job creation in the U.S., as well as act as a catalyst for growth across the world,” said N.  Chandrasekaran, the chief executive of Tata Consultancy Services, in a statement. “Technology will play a strong role in driving the next phase of growth,” he predicted, adding that Indian companies may play a significant role by forming partnerships with companies in the United States.

R. V. Kanoria, president of Federation of Indian Chambers of Commerce and Industry, said in a statement that he hoped the new Obama administration would “take a long-term and practical view on issues such as outsourcing, which ultimately are in the U.S. national interest” because outsourcing helps American companies drive down costs and expand.

Nasscom said it shared many of the economic goals Mr. Obama hopes to achieve and highlighted the need to work together as the global economy recovers. “It is more important than ever that India and the U.S. find ways to partner together to spur innovation, foster economic growth, develop an educated and skilled workforce and create jobs for the modern global marketplace,” it said in a statement.