BANGALORE AND BUFFALO

President Obama is essentially taking his election campaign into tangible action and in the process, does use the campaign language for iterations and policy making. Bangalore is an
expected reference when it comes to any discussion on outsourcing. In fact, Bangalore is a verb today. If your job is Bangalored, it signifies the job is outsourced to any country which is not yours, not necessarily India.

Should Indians and Indian techies at that react to Obama's tax proposals? Is Obama not entitled to carry forward the mandate of people? And aren't democrats, leave alone Obama, known for anti-outsourcing stances? And inspite of the political lobbying against outsourcing, hasn't India become a global destination for outsourcing? And is Bangalore not a brand that stands tall on its promise and delivery?

The questions are worth pondering over. We all, including Indians, need to see the unique context in which the electoral rhetoric against outsourcing is extending itself into tangible action against tax incentives for companies who have been blamed to create jobs outside USA.

No doubt it is protectionism back in its original elements. No doubt it is a reversal of liberalization in trade and services.

Now the questions that will eventually arise - which I am sure, over long term, Obama will pursue for a resolution, would be about the sustainability of enterprises that look inward and try to produce with supply constraints on talent both in quantitative and qualitative terms. Having said that, I would like to add, this will be an area of opportunity for disruptive IT Companies of India to think through new business models which seek to protect jobs in US with a goal of making tax effective solutions that seek to achieve a higher component of on shore collobaration and a dominant share of business transformation projects at the higher end of the value chain,
rather than, focusing on the labour arbitrage model. It is quite possible that these companies may use the multi-ethnic and multi-lingual resource base in US for setting up on shore, near shore and off shore units where Americans are employed in all these zones - a prospect which leads to creation of more jobs for US citizens and a prospect that can lead to fresh tax incentives from Obama.

While the emerging markets do hope to decouple from the US and Europe and do emit such signals off and on, a US which takes longer for recovery is the worst that can happen to, among others, emerging markets like India. We need US to revitalize its economy, boost its business and consumer confidence and boost its trade and investment with the rest of the world, particularly the new engines of the world which have mitigated the risk of a deeper and longer recession than the world has experienced earlier.

Does this mean India should remain silent? I think India should hasten all those possibilities where there is a generation of US jobs through its Corporates eager to increase global foot prints. Obama or US or anyone has not said anything against Indian employers in their land or Indian Investments in their markets. With valuations being what they are now, the Indian corporates with global aspirations should enter US in a big way, create jobs in US as well as in India. There are Indian Corporates like Bharti Airtel who are known to outsource processes from outside India, perhaps US or at least the developed world. This potential needs to be further unlocked.

Secondly, India should take up with US the double taxation treaty for a review and negotiate for right terms and conditions in the changing scenario.

Thirdly, India should explore the low hanging fruits of collaborating with US for establishing nuclear plants making use of the Indo US nuclear deal. I read during the height of deliberations on the nuclear deal in India, that each nuclear plant creates at least 5000 jobs in USA.

Fourthly, Obama administration is keen to boost investments in alternate energy. India has a great potential to do Indo US joint ventures in wind energy and solar energy. India can become a potential investor in such projects both in US and India. The green agenda of Obama is good not for just US but for countries like India whose economic well being is, often, dominated by high oil prices.

Fifthly, as US Corporates will need the Indian talent anyway, India should lobby with their help for easing of Visas as a barter for the Obama agenda of protecting jobs. The Corporates will need to either outsource or immigrate a certain component of the talent. This will be inevitable and this should be institutionalized.

Sixthly, there may be scope for employing Americans in key positions in the Indian BPOs and KPOs - even if this will not boost numbers to a high US count, the rhetoric will be dented and the sentiment can ease a bit, which is also important, if not all important.

As a Bangalorean, I am glad Obama needed Bangalore as a powerful expession of his push on the tax incentives to US Corporates outsourcing from rest of the world. As an Indian, I am confident that sooner than later, the lobby for outsourcing will only get strengthened and excesses of the day will get corrected. Then it will no longer be Bangalore Versus Buffalo. It will be Bangalore and Buffalo - generating a value that exceed the sum of the two.