Indian IT Outsourcers Wary After Obama Re-election

The mixed reaction around the world to President Obama’s re-election turned more worried in India, with Phaneesh Murthy, CEO of iGate Corp., calling it “not the best news for India or the IT outsourcing industry,” The Wall Street Journal reports.

A Dice.com poll of 2,000 IT pros in the United States released Oct. 29 found 45 percent supporting Obama as the candidate most likely to address their needs vs. 37 percent for Republican challenger Mitt Romney, but not with the fervor of 2008, when 63 percent favored Obama, compared with 27 percent backing John McCain.

While painting Romney as “the outsourcing pioneer” from his tenure at Bain Capital, Obama has urged companies to bring work back to the United States and announced programs to boost training of domestic workers.

In addition to facing pressure to foster innovation — not just provide wage arbitrage — the Indian outsourcers face competition from up-and-comers in the outsourcing market such as Chile. On top of that, there’s the challenge posed by cloud computing and automation — Horses for Sources recently referred to “Robotistan” as “outsourcing’s cheapest new destination.”

In the meantime, the Indian outsourcers have set up shop in the United States near top American clients such as Microsoft and Boeing, pledging to hire more American workers.

Peter Schumacher, the president and chief executive of Germany-based management consulting firm Value Leadership Group, is quoted in the Journal article stressing that the Indian outsourcers’ focus should be on fulfilling client companies’ needs, saying:

India-based firms that manage to connect more effectively with the business agenda of their clients and build unique advantages will see strong growth in the U.S. for years to come, independent of who is in the Oval office.