Infosys expresses concern over Ohio state govt's move
The move is yet another blow to the Indian IT industry, which is facing higher visa costs.
By ET Bureau & Agencies |
BANGALORE: Infosys, the country's second largest software company, today expressed concern over the Ohio state government's move to ban IT outsourcing to offshore locations such as India.
Infosys CEO & Managing Director Kris Gopalakrishnan said, "We are concerned with the recent news from US about banning offshore outsourcing by Ohio State government departments.
"Infosys' initiative in the Public Services sector is focused on creating a domestic Delivery Center in the US hence this should not be affected."
The US state of Ohio has banned outsourcing of government IT and back-office projects to offshore locations such as India, raising fears of similar moves by other American states struggling to cope with high unemployment rates.
“There are pervasive service delivery problems with offshore providers, including dissatisfaction with the quality of their services and with the fact that services are being provided offshore,” Ohio governor Ted Strickland said in an executive order passed last month.
The move is yet another blow to the Indian IT industry, which is facing higher visa costs and rising protests against outsourcing in other US states.
Last month, the US Congress passed a controversial legislation increasing visa fees for funding the country’s Mexico Border Security program. States such as Virginia are facing a massive backlash against outsourcing that could further affect the prospects of Indian IT firms.
TCS is the only Indian company to operate in Ohio. It employs 300 people and gets $19 million in tax credit for creating local jobs. India’s second-biggest software exporter, Infosys, has already identified the government outsourcing market as the next big opportunity and established a focussed subsidiary—Infosys Public Services, headed by Eric Paternoster—in June this year.
Rival Wipro also has a nine-year, $407-million outsourcing contract from Missouri for delivering healthcare services.
Ohio’s move adds to the perception that outsourcing is risky and that it involves serious loss of jobs. Indian companies have been at pains to point out that offshoring work actually improves the health and efficiency of American companies and government departments.
They have also been making serious efforts to hire more Americans and keep much of the work stateside. But that does not seem to have helped. The latest curb could, if replicated by other states, mean increased hiring of local staff in the US for delivering services, affecting the profitability of Indian companies.
Such measures would also make Indian firms less attractive for awarding multi-billion-dollar government outsourcing contracts, experts and officials tracking the sector said.
Infosys CEO & Managing Director Kris Gopalakrishnan said, "We are concerned with the recent news from US about banning offshore outsourcing by Ohio State government departments.
"Infosys' initiative in the Public Services sector is focused on creating a domestic Delivery Center in the US hence this should not be affected."
The US state of Ohio has banned outsourcing of government IT and back-office projects to offshore locations such as India, raising fears of similar moves by other American states struggling to cope with high unemployment rates.
“There are pervasive service delivery problems with offshore providers, including dissatisfaction with the quality of their services and with the fact that services are being provided offshore,” Ohio governor Ted Strickland said in an executive order passed last month.
The move is yet another blow to the Indian IT industry, which is facing higher visa costs and rising protests against outsourcing in other US states.
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Last month, the US Congress passed a controversial legislation increasing visa fees for funding the country’s Mexico Border Security program. States such as Virginia are facing a massive backlash against outsourcing that could further affect the prospects of Indian IT firms.
TCS is the only Indian company to operate in Ohio. It employs 300 people and gets $19 million in tax credit for creating local jobs. India’s second-biggest software exporter, Infosys, has already identified the government outsourcing market as the next big opportunity and established a focussed subsidiary—Infosys Public Services, headed by Eric Paternoster—in June this year.
Rival Wipro also has a nine-year, $407-million outsourcing contract from Missouri for delivering healthcare services.
Ohio’s move adds to the perception that outsourcing is risky and that it involves serious loss of jobs. Indian companies have been at pains to point out that offshoring work actually improves the health and efficiency of American companies and government departments.
ADVERTISEMENT
They have also been making serious efforts to hire more Americans and keep much of the work stateside. But that does not seem to have helped. The latest curb could, if replicated by other states, mean increased hiring of local staff in the US for delivering services, affecting the profitability of Indian companies.
Such measures would also make Indian firms less attractive for awarding multi-billion-dollar government outsourcing contracts, experts and officials tracking the sector said.
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