Obama's protectionism: Infosys does not see any immediate impact

According to the White House, the initiative is not aimed at making American companies less competitive

 

President Barack Obama's proposed removal of tax incentives for American companies outsourcing jobs could mean that large outsourcing customers such as GE and Citibank might have to pay certain taxes on their income from international markets, making it less attractive for customers to send IT projects to cheaper offshore locations such as India.

 

On Monday Obama reiterated his anti-outsourcing rhetoric once again, and said that American companies shipping jobs overseas will be required to pay more taxes, and that tax-deferral benefits for such companies will be ended.

 

"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," Mr Obama was quoted as saying by news agency Bloomberg.

 

S Gopalakrishnan, chief executive of India's second biggest software exporter said he will wait for more details about the proposed legislation. "Right now, I do not see any impact on our business," he told ET on Tuesday. Infosys serves US customers such as American Express and Bank of America.

 

While there is no clarity yet on how such proposals would be structured, a White House spokesperson said that the initiative is not aimed at making American companies less competitive.

 

Source: The Economic Times