Posted on 02/17/2004 12:42:53 AM PST by sarcasm
BOMBAY, India -- The rising political reaction in the United States to the loss of some American jobs to workers overseas is creating a whiplash effect among India's leading technology companies.
"The dramatic buildup of opposition before the U.S. elections is disturbing," Jaithirth Rao, the chairman of a leading software and call-center company, MphasiS BFL Ltd., said in an interview at the three-day annual meeting of Nasscom, India's software industry trade association last week.
MphasiS, based in Bombay, has 6,000 employees, and its operations are spread across the cities of Bangalore and Pune. More recently, it has expanded to Shanghai, China and Tijuana, Mexico.
Companies such as MphasiS are the biggest beneficiaries of a movement among many of the largest corporations in the United States to shift certain white-collar work to low-cost India, where local companies are adding thousands of skilled, English-speaking employees every quarter to meet the increased demand. At the same time, companies such as General Electric and Microsoft Corp. are expanding their operations in India on everything from basic customer service to high-end research and development.
The political reaction in the United States against such outsourcing has built rapidly in the last year; nearly two dozen states have voted on legislation to ban government work from being contracted to non-Americans.
More recently, the Senate approved a bill aimed at restricting outsourcing of contracts from two federal departments. The House has not acted on similar legislation.
"We are concerned that this is federal legislation and that it is sponsored by a Republican," said Kiran Karnik, president of the software association. "Republicans are traditionally free-marketers."
Karnik, who has been vocal in promoting the cost-saving advantages of India's workforce, said he was perturbed that "all of the election-year rhetoric equates offshoring with job losses."
More than 70 percent of India's software export revenue comes from companies based in the United States, but less than 2 percent of India's export earnings comes from work for American governments, and the software and related service industries account for only 3 percent of India's economic output.
Still, the industry is increasingly associated with the Indian economy's upbeat mood, and its leaders are anxious. As fears of American white-collar job losses continue to rise, they say, the issue is expected to become a sticking point in trade negotiations between India and the United States.
Gartner, a technology research firm, predicts that the outsourcing reaction will continue to escalate at least through the fall.
"The aggressive campaign against moving work to low-cost destinations will become a political imperative for the presidential campaign," said Partha Iyengar, a Gartner vice president for research who is based in Bombay.
American corporate customers of Indian software companies were not conspicuous at this year's annual meeting. Corporations in the United States, and the Indian companies they contract with, kept a low profile.
However, Cognizant Technology Solutions, a company based in Teaneck, N.J., has 70 percent of its development operations in India and said it was still seeing five to eight customers and prospective clients from the United States every week at its offices in Chennai in southern India.
In a further indication that outsourcing is likely to be an increasingly touchy subject here, Robert Blake, the U.S. charge d'affaires in New Delhi, said last week that India's best response was to open its markets wider to help create other jobs in the United States.
Blake's remarks rankled India's government. "That is not the way to go," said Yashwant Sinha, the external affairs minister. "It smacks of retaliation that 'if you don't open up, we will impose restrictions,' " Sinha told reporters last week.
"The U.S. has to realize that by outsourcing, its companies remain competitive and save jobs," Sinha said.
With an extremely large US presence. They even bought a company I worked for.
The Indian Ph. D. with perfect English and an instinctive knowledge of the product tend to start their own companies, often in the US. It's a CIO dream to think one can really buy three times of something at 1/10 the price.
American learn English by speaking and hearing it. Indians learn it by reading and writing it. That is why they have trouble speaking English. It doesn't follow a logical format. They don't know where to put the accent on the syllables.
What about our "offshore" Congress?
More recently, the Senate approved a bill aimed at restricting outsourcing of contracts from two federal departments. The House has not acted on similar legislation.
Gee, I wonder why the House is lagging. Here's a hint. These Washington-based India government organizations have more influence in "our" House of Representatives than we do
http://www.usindiafriendship.net/ and http://www.usinpac.com/
or see what some Americans have learned about the 170 members of Congress owned by the India government (the House India Caucus). See
http://www.outsourcecongress.org
or go directly to the IndiaPAC page at
http://www.outsourcecongress.org/rep/indiapac/
Don't even thnk about what the chi-coms own in Washington.
Though the free traders scream about government interfering they don't seem to mind India and Chinese governments' mucking up free trade as long as it benefits their "free trade" pocketbooks.
Also, somewhere out there in Googleland is a dollar amount that U.S. taxpayers (OPIC, Ex-Im Bank, special programs, etc.) have risked/spent supporting our "capitalist" corporations' efforts to build infrastructures and factories for India and China. To free traders that kind of government interference is "capitalism" -- as long as it benefits them.
This is politiciansspeak. Both Dems and Republicans know that the base will vote for them, no matter what they say or do. Next comes the lying to the weak minded people who could vote either way. "Losing your job is good for you."And believe it or not, many will buy this line, and will go to the polls gladly.
Judging from the balance of trade deficit, it pretty much is. At least, the street coming this way is a whole lot larger than the street going that way.
I'll defer to the experts but it seems to me..
I interpret oursourcing to mean moving jobs to India, for example, then importing the work performed there whether the work is services or goods.
I think in general the foreign companies with factories/services here in the U.S. are marketing to the U.S. and are not exporting very much to their home countries. They have factories there.
That's a difference that the likes of the Limbaughs, Hegecocks, and Sullivans overlook (on purpose?) when scoffing at and ridiculing the notion that offshoring hurts American workers -- in between scoffing at and ridiculing the American workers themselves for not wanting to work, of course.
Those free traders argue that we've got many times more invested in Europe that Asia. True. But we are allowed to market to European citizens, that's why the factories are there; we don't have to export the goods and services back to the U.S. to sell. We have factories here for our domestic market.
Only if we penalize German imports the way India penalizes our exports. Last time I checked, you could purchase any number of German products, at prices commensurate to their quality. (caveat: with the merging of Chrysler/Benz the quality of the former has increased and the latter, decreased - buy a Beemer, you'll be glad you did.)
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.