Saturday, May 09, 2009

Bangalore or Buffalo

While the industry debates whether or not Obama’s new proposal on tax is going to hurt IT outsourcing to India it is missing the forest for the trees. For the first time in recent history we have the President of United States talking openly about populist measures and proposing steps for greater protectionism. Given that US has virtually nationalized its greatest bastions of capitalism and free markets(read financial institutions), this development indicates a dangerous trend not just of the IT outsourcing industry in India but also outsourced manufacturing in China and from other developed countries.

Given that the unemployment rate is at record levels and rising, this (current proposal) could perhaps merely be more visible steps or simply rhetoric to boost the government’s popularity, what we need to watch out for is follow on actions.

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