US tax plan won't affect Indian firms: NASSCOM

BANGALORE:NASSCOM today said that U.S President Obama's Bangalore-Buffalo comment has nothing to do with India or the outsourcing industry as a whole, though the comment has caused apprehension among various industry players.

While commenting on Obama's apparently controversial remarks, Pramod Bhasin, Chairman of NASSCOM and president and CEO of Genpact said the comment was on foreign investment by American multinationals.

“The Obama proposal has got nothing to do with outsourcing. In fact the it does not mention outsourcing anywhere. It is just about foreign investment by American multinationals,” he explained. “It impacts Shanghai more than it impacts Bangalore.”

Bhasin further added that this issue has been going on in the US since Clinton's administration, and it's just that Obama has brought this issue to the table.

NASSCOM President Som Mittal said that US companies make approximately $700 billion profits outside the US and pay just 2 to 3 billion as tax. “This proposal is related with the tax break of the US companies which they make out this profit. Let us not confuse this with outsourcing,” he added.

As per the media reports even the White House officials said the plan is an attempt to reduce the role of small tax-haven countries that have eroded the tax bases of developed countries such as the U.S.

This proposal by Obama had caused widespread protest from American companies, which outsource works to other countries.

Mittal retreated that big MNCs' growth comes from expanding their business internationally.

“The plan by Obama is just a proposal and not yet a bill. We expect this issue to be highly debatable and may invite enormous amount of opposition not only from the American MNCs but also from the governments across the world,” he added.