Ohio's move an electoral rhetoric: NASSCOM

BANGALORE, INDIA: Even as the report that U.S. state of Ohio is banning outsourcing of government IT and back-office projects to offshore locations such as India, raising fears of similar moves by other American states, NASSCOM, the voice of Indian IT industry, said that the move is an electoral rhetoric and more such moves can be expected in the next few months.

“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. There is more such electoral rhetoric that can be expected in the next few months,” NASSCOM said in a statement.

While the public sector represents a small fraction in the overall demand for offshored services, it does represent a future focus area, it said.

“Globally governments are beginning to see the benefits that can be reaped out of employing Information Technology in public services. India too is opening up not only in IT, but other areas, representing a growth market for global and domestic companies, the statement added.

It said Ohio’s ban on outsourcing 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.

It is imperative that the focus on free trade remains strong, but instances like Senator Schumer’s Borders Security Bill and the Ohio State ban on outsourcing only reinforce our stand on discrimination. NASSCOM’s focus is to build open markets, global trade and we will work with key stakeholders to minimize the impact of such events by highlighting the benefits of employing Information Technology with international governments.

NASSCOM also said international trade is a federal subject and it is studying the legality of such a bill being passed by a state government.

NASSCOM is leading a delegation to the US later this month and will be taking this up with relevant officials in the US and will seek support from Anand Sharma, Minister for Industry and Commerce who is also visiting US at the same time, to address this issue with his counter parts.

Earlier, Infosys CEO and MD Kris Gopalakrishnan said that though Infosys is concerned with the development, the company's initiative in the public services sector is focused on creating a domestic Delivery Center in the U.S. and hence this should not be affected.

When contacted by CIOL, TCS refused to comment on the issue.

Meanwhile a Reuters report said that in the Indian stock market, export-focused software services firms fell after the Economic Times published this report. Top outsourcer Tata Consultancy Services (TCS) rival Infosys Technologies shed 1 per cent each, while Wipro was down 0.3 per cent, it added.