India Inc calls Obama 'protectionist'
Agencies
Posted: Tuesday, May 05, 2009 at 1836 hrs IST
Updated: Tuesday, May 05, 2009 at 1836 hrs IST
New Delhi: India Inc described the US President Barack Obama's announcement to punish American firms by levying high taxes on their outsourcing business as "protectionist" and a retrograde measure that, it said, will hurt the US companies.
"Taking measures that would force companies to restrict their economic activities in one vision and not in the other is a retrograde step," the Federation of Indian Chambers of Commerce and Industry (FICCI) said.
FICCI President Harsh Pati Singhania said while Obama's move would have some impact on the US investment abroad and into India, in the long run this would only run counter to the interest of US corporations seeking global presence.
Obama had said on Monday that the US would stop letting American firms which create jobs abroad take deduction on their expenses in their tax liabilities.
"It's a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York," Obama said.
Criticising the US President's announcement, Assocham President Sajjan Jindal said, "Taking resort to protectionist tendency will kill the spirit of competition... and dilute the spirits of WTO."
He said an American survey recently found that the US benefited ten times more than the countries where it outsourced jobs.
Comments
» Another tail-spin has been initiated...
Posted by CK Raju, Thrissur on 2009-05-06 08:12:55.431817+05:30
Indian SEZs are now set to vaporise. If it materialises, then it would the first incident of its kind. An act purely created to satisfy the needs of mega corporates and conglomerates to earn more non-taxable profits - a notorious one like SEZ Act - has now become a graveyard for the mega investors. A blind and deaf, yet highly vocal NASSCOM and their brainless heads who repeatedly made irresponsible statements regarding future scope of IT markets, have played a crucial role in causing an avalanche here. Now, imagine the plight of little small-time investors who have put their belongings into stock markets, having lost everything earlier. Who will compensate their losses now ? Will NASSCOM do it ? Will Chidambaram help them ? Will Manmohan help them ? Will all those MPs who silently approved the SEZ Act, which paved the way for massive investments - 90% - in all, in the Indian soil, compensate ?
» PROTECTIONISM IN INDIA
Posted by Niranjan on 2009-05-06 07:13:53.378312+05:30
WE HAVE BEEN PRACTICING PROTECTIONISM FOR SO LONG THAT WE ARE LIKE A POT CALLING A KETTLE BLACK. FOR A LONG TIME A PERSON FROM ONE STATE CANNOT GO TO STUDY IN ANOTHER STATE AND WHOEVER DOES, IS CONSIDERED AN OUTSIDER EVEN IF THE FAMILY HAS SETTLED DECADES AGO. A PERSON NOT SEAKING THE LOCAL LANGUAGE IS CONSIDERED AN OUTSIDER. AT THE TOURIST STOPS WE CHARGE FROEIGNERS EXHORBITANT AMOUNT OF MONEY FOR EVEN ENTRANCE AND CHARGE EXTRA FOR EVEN CARRYING A CAMERA OR VIDEO EQUIPMENT. IF DISNEY IN USA OR TOKYO CHARGES PEOPLE BASED ON THEIR RACE OR PLACE OF ORIGIN, WE WILL SCREAM BLOODY MURDER. ALSO, IF THE TAX STRUCTURE ALLOWED TAX DEDUCTIONS FOR EMPLOYING FOREIGNERS, WE WOULD ALSO FIND FAULT WITH THEM. SO, LOOK AT THYSELF BEFORE YOU FIND FAULT WITH OTHERS.
» Writer
Posted by J.R.Murthy on 2009-05-06 07:07:40.997885+05:30
It is about time that our President Obama wants American companies operating overseas to pay the same tax rate as other American companies in USA. These overseas companies pay a maximum of 2% in corporate taxes and it is not just the money which is nearly $21 Billions each year which is lost to the American tax payer. It is the employment. Overseas companies operating in countries such as India, hire the locals there for considerably lower wages and they take jobs away from equally or even better qualified American workers. What is wrong to ask them to pay the same tax rate as their fellow US companies in the USA?
» Elimination of Subsidies
Posted by Arvind K Mathur on 2009-05-06 05:23:53.004919+05:30
Why should US companies who export jobs get a subsidy and the companies that dont - not get any. The elimination of a subsidy does not mean taxes. They will be at par with the companies that dont export jobs. What is wrong with that? Why should the US government give an incentive NOT to employ US citizens?
» India Inc concerned about US interests?
Posted by Adam on 2009-05-06 04:36:05.235777+05:30
Why should US companies get US tax dollars subsidies to hire people in India or China? They are not doing any service to US taxpayers and workforce.
» It is time that India retalliates on this. This deal favours China since it does not impose duties on things made abroad.
Posted by S.Balakrishnan on 2009-05-06 01:55:11.650103+05:30
How about things made in China? Almost everything that USA consumes is made in China and that reduces labor especially for the unskilled in the USA. Now with recession looming is it not necessary that they levey an import duty on things made in China also! Sure it will increase the cost for consumers but so does anything that affect the skilled workers in India. The reason that many companies go to India is that the US education is not upto the task yet. By acting against the higher level workforce that India supplies USA under Obama is playing politics. It is time India takes strong action against the USA in retalliation as China would have done if USA imposes duties on its imports.
» Foolish Measures
Posted by Vinay Syal on 2009-05-05 22:56:18.363613+05:30
Let the dust settle down , America will realize the futility of protective measure. Agreed USA is an inevitable country but so is the participation of Indian IT professionals in the growth of USA. This will dawn on USA sooner than later.
» King
Posted by Thomas - Kerala on 2009-05-05 22:31:09.568868+05:30
India needs to continue to push its services to other countries, not just rely on US businesses. India should also start doing more business in these countries and start other exports of goods like China does so that we have a diverse economy.
» But Seriously...
Posted by oldindian on 2009-05-05 22:07:08.74145+05:30
I think obama is doing what he thinks is best for his country. We must appreciate his "my country first" attitude. Can our politicians do the same? For eg. what value add does KFC brings that our punjabi dhabas dont have? What value add does cocoa-cola brings? Ditto for Mcdonalds, Pizza hut, domino pizza and Mcdonalds. Why cant we ask them to close their shops and go back home to protect the livelihood of so many small restauranteurs whose indian foods are much tastier than the fares served by these chains. And why do we need Ford and GM (Both of them sick because of their non competitiveness back in US) in india? We can give that opportunity to TATA and maruti. We should clearly decide among the companies that we have the ones without which the indian customer can carry on with his daily life.
» Tax subsidies eliminated
Posted by Jane on 2009-05-05 22:03:40.399524+05:30
Please keep in mind that Obama's plan is not to impose extra taxes on companies that export jobs -- it is merely to require them to pay the same taxes as companies that employ workers in the US. By removing what was essentially a subsidy to companies that exported jobs, Obama is not being protectionist, but rather is simply restoring equal treatment. Now all American companies will pay the same taxes on their income, whether that income is derived from domestic sources or foreign sources. Seems only fair to me.
