Obama rejects view of India as "land of call centres"

By Alister Bull and Patricia Zengerle

MUMBAI | Sat Nov 6, 2010 6:54pm IST

MUMBAI (Reuters) - President Barack Obama hailed India on Saturday as a vital source of U.S. growth and jobs as his administration announced relaxation of U.S. export controls to spur trade between the two countries.

"As we look to India today, the United States sees an opportunity to sell our exports in one of the fastest growing markets in the world. For America this is a jobs strategy," Obama said as he kicked off a 10-day tour of Asia.

Obama's Democrats lost control on the U.S. House of Representatives in congressional elections on Tuesday as voters punished the party for high U.S. unemployment after a campaign marked by criticism of China and outsourcing hubs like India.

In an address to a business summit, the president said U.S. companies were finalising deals worth around $10 billion.

"Today's deals will lead to more than 50,000 jobs in the United States," he said.

Deals include previously announced transactions involving General Electric for aircraft engines and gas turbines, and Boeing for 737 passenger planes. But details on a key $4.5 billion sale by Boeing of C-17 military transport planes were still being ironed out.

White House aide Michael Froman told reporters Obama would ease export controls imposed after India's 1998 nuclear tests, and support Indian membership of four key global nuclear nonproliferation regimes.

"This really includes India as a major player in a non- proliferation world... and it recognizes the nature of the strategic relationship we now have with India," Froman said.

The four regimes are the Nuclear Suppliers Group, the Missile Technology Control Regime, the Australian Group, which aims to reduce the spread of chemical and biological weapons, and the Wassenaar Arrangement, a multinational effort to control the transfer of conventional arms and dual-use technology.

Obama will remove almost all of the remaining Indian defense and space organizations from a list of entities maintained by the U.S. government to curb proliferation, and relax so called dual-use rules for Indian firms that regulate technology with both civil and defense applications.

"We will end up treating India similar to other close allies and partners other than as a country of concern," Froman said.

Terry McGraw, head of McGraw-Hill Companies and chairman of the U.S.-India Business Council, said Obama's visit came at a vital time amid rising anti-trade rhetoric spurred by high unemployment at home and elsewhere.

"When you've gone through an economic downturn to the extent that we have, a lot of countries very easily go protectionist and we've seen a lot of protectionism around the world. You can't win in a protectionist kind of view," he said.

(Editing by Andrew Marshall)

- Reuters

Outsourcing is here to stay …

Outsourcing as a trend has caught the imagination of world but like every successful thing it has its own critics.

In recent times there has been much of speculation about Mr Obama’s policies and its impact on outsourcing. But should we really need to be worried about it? Should we ring the danger bells? Is it a bubble which will burst or is it a flash in the pan?

I believe the answer to all these questions is a big No ...

There is a strong case for the outsourcing industry to stay and in fact grow at a very fast pace. Recent trends show an exponential growth in outsourcing especially in newer areas like legal outsourcing.

So, why am I bullish on the outsourcing industry and particularly legal outsourcing industry? Here is my rationale based on facts: Mr Obama’s comments are more towards IT and software industry and does not affect the legal process outsourcing. In fact American companies generate more than 50 per cent of their business outside the US. To be globally competitive, they have to depend on globally shared services.

Outsourcing started as a way of obtaining services from outside supplier at a cheaper cost than possible in one's own organization or country. It still is the primary motivation but is it the only one? Companies have realized that Outsourcing not only helps in achieving the cost advantage but also provides a quality and timely services.

The compulsion of US to outsource work is also an admitted fact by Mr Obama by the remark that "…. but not enough talent at home”. Hence, to carry out growth, the US companies will be requiring talents from outside.

Infact several researches show that Outsourcing has a beneficial impact on the outsourcing client company. It is no surprise that the biggest employers of the local talent are the companies who are the largest outsourcers.

Trends in the legal outsourcing are even more encouraging with big legal support service providers like Integreon and CPA Global signing up multi million dollar deals with the giants like Rio Tinto and Cameron McKenna respectively. They are also partnering with magic circle law firms notably Clifford Chance, Eversheds and Pinsent Masons showing keen interest in the legal outsourcing. Recently, Slaughters and May has also expressed a keen interest in outsourcing some of its operations to big Indian LPO’s like CPA to reduce its cost.

With trends like this I can say with conviction “Outsourcing is here to stay”.

Posted by Team - Global LPO Conference 2010, October 20.