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US outsourcing ban regressive: Anand Sharma

Last Updated: Saturday, September 11, 2010 - 17:59

Zeebiz Bureau

Bangalore: Terming the recent outsourcing ban by the US’ Ohio state as “regressive”, Commerce and Industries Minister Anand Sharma on Saturday said that the move will further weaken the recovery of the fragile global economy.

The minister’s reaction came close on the heels of Ohio passing an executive order to ban outsourcing of government IT services from the state.

Speaking in Bangalore at an event, Sharma said “erecting fences” like this one goes against the demand-supply principles of modern day economics. Citing a report by the Peterson Institute for International Economics, he said that rules-based multilateral trade-system has become more important than ever in the wake of protectionist measures adopted by various nations.

Criticizing the US’ stand he said that these measures hamper the early conclusion of the Doha Development Round of WTO, which is intended to lower trade barriers among countries.

Commenting on the H1-B Visa fee hike issue he said that the “above 50 rule” was discriminatory and expressed hope that the issue will be resolved at the earliest.
H1B Visa fees was increased by USD 2000 in August. Small consulting firms with less than 50 employees will not be affected, but if H1 employees are over 50 and 50% or more of them are under H1 visa, then fees goes up by USD 2000.

Sharma also said that the social security benefits were immaterial as many of them return to India.

Social security had become a contentious issue during the H1B Visa row. The Visa holders are entitled to social security benefits even if they leave the US, provided they paid the social security benefits for the last 10 years.


Speaking on the same occasion Infosys mentor Narayana Murthy said that the minister had the last word on the issue. However, he said there is something for the companies involved also to do. The companies have to focus more on innovation, Murthy said.

According to Murthy, though geo-political issues are bound to create friction among trading countries, it is upto the management of the companies to innovate, as this was the only way to maintain relationship with their clients.

First Published: Saturday, September 11, 2010 - 17:59
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