With the US presidential elections looming, one of the issues gaining centrestage is that of unemployment in general, and the effect outsourcing has on this, in specific. In fact, President Obama even announced that he would enact policy measures to curb outsourcing?by ending years of tax incentives to those US companies creating jobs overseas (in Bangalore, for example), and instead giving them to companies creating jobs within the US (like Buffalo City). This ?say no to Bangalore, yes to Buffalo? mindset has been gaining ground steadily, especially since unemployment still remains a major concern for US policymakers and citizens alike. A recent Nasscom report, however, shows that Indian IT companies?the majority recipients of US outsourcing contracts?are in fact creating employment in the US, and even adding to that country?s revenue. Titled India?s Tech Industry in the US?A Contribution Review, the report finds that Indian tech firms created 107,000 jobs in the US in FY11, up from 58,000 in FY06, a jump of 84.5% in the five years that included the worst-hit financial crisis years. Indirect employment by Indian tech companies?logistics, computer hardware, courier, etc?also rose sharply, from 156,000 in FY06 to 280,000 in FY11. The report goes on to say that several Indian IT companies?Genpact, TCS, MindTree and HCL?are looking to add more jobs in the US in the next few years (MindTree, for example, wants to increase its US workforce by 30%). Even in terms of revenue, the report says the Indian IT industry has paid over $15 billion in taxes to the US Treasury over the five years FY06-11.
So, while outsourcing does create jobs in India that should ?rightfully? stay in the US, there is a reciprocal effect that must also be taken into account.
