After Obama’s very controversial bill aimed at stopping job losses to Overseas markets like India, many IT professionals in India are worried what will be the impact on them. Nasscom has come out and said Indian companies wont be impacted but this is a protectionist approach from Obama. To a certain extent this move wont affect India based IT companoies like TCS,Infosys, Wipro and others. But this will definitely impact the revenues of tier 1 MNC’s like IBM,EDS,Oracle and Microsoft.
The proposed tax changes if passed could increase their corporate taxes by 10% which is sizeable margin for these players. Though they will be affected many might not simply abandon countries like India. IBM can get the same work done in India for 10-20% of the cost in US. So in near term there wont be immediate job losses in India.
But these companies might rethink their aggressive expansion plans in India, If Obama gets his way in this bill, He surely will put more restrictions on Offshoring of the from US. Especially companies which are getting federal funds are already under tremendous pressure not to offshore any new work to India.
But then if Obama decides to go further down the same line, it can end up disastrous for US economy. These companies like IBM,EDS will lose out to their Indian counterparts by not able to match their low bidding prices/scalability. Other companies like Banks and Automakers if forced to hire local talent at 10 times more cost will again become uncompetitive against their global opponents. Hopefully Obama will listen to some sound advice else he will end up creating another country like USSR and fail completely.