Industry representatives with business interest in the US expect President-elect Barack Obama to increase government spending to revive the sagging fortunes of the world’s largest economy.
Pump-priming in the US would directly benefit India, as it is India’s largest trading partner, accounting for over 17 per cent of total exports. Also, business leaders discounted any negative impact of Obama’s presidency, saying commercial decisions in the US were largely independent of government.
“The revival of the US economy is critical to us and the world economy, and it is inevitable,” said Rajeev Chandrasekhar, president, Federation of Indian Chambers of Commerce and Industry. “He (Obama) has talked about pumping in $50 billion and tax breaks to the middle class to kickstart the US economy,” he added.
With the deepening of the global financial crisis in the last two months, the US economy is on the verge of slipping into a recession, which is technically defined as decline in economic activity in two consecutive quarters. Already, UK and Japan have declared officially that their economies are in recession. Indian government too has revised its growth estimates for the current fiscal to 7.5-8 per cent.
With regard to Obama’s anti-outsourcing stand, which is expected to harm the Indian BPO industry, American Chamber of Commerce in India executive director Ajay Singha said the US government’s role was extremely limited in businesses and hence it would not affect the US business here, including outsourcing.
He added that the slowdown in the US had encouraged small and medium enterprises there to look at India for expanding their business plans in a high growth market economy with a low-cost manufacturing base. “The best is yet to come and it will come now,” Singha added.
The industry also said that Indo-US economic relations will only get better. Videocon Chairman VN Dhoot said, “I think outsourcing from the US will continue and the software industry in India will gain from that. Under Obama, the US economy will do well and it will help all the Indian industries dependent on US.”
The National Association of Software and Services Companies (Nasscom), an information technology industry lobby body, said that Obama would not do anything to harm Indian IT.
Godrej Chairman Adi Godrej also felt that Obama’s win would have a positive impact all over the world and Indo-US economic relations would now further improve.
However, there were some like Federation of Indian Export Organisations (FIEO) President Ganesh Kumar Gupta who sounded caution on the economic policies of the President-elect: “If the US increases agriculture subsidy, as stated by Obama in his speech earlier, it will give a jolt to farm exports from India and other developing countries.”
