Undaunted by US President Barack Obama's Bangalore-Buffalo remark, the domestic IT industry today said the comments had nothing to do with outsourcing or with India.
"I think it (Obama's comments) is not an issue of India but how the US companies there and US subsidiaries are structured and the taxation followed by the US over the years," said IT industry association Nasscom's President Som Mittal. He was speaking to reporters after presenting the Nasscom-McKinsey Report on Perspective 2020.
"It has nothing to do with India," said Mittal. The President has said that the additional taxes that he would get would be invested to do research training and so on to create jobs. "I think that (creating more jobs) should be welcomed," said Mittal.
"Our (IT) industry is actually a part of the solution that America requires to become more competitive so that transformation happens faster and not an issue of a problem we have created."
On whether the issue impacts India, he said, "If we see it impacting us in any way, as a bill is drafted, we will do our needful," he said.
The industry, he said, could also focus on the non-US markets which also contribute to the revenues.
Reacting to the statement, Nasscom chairman Pramod Bhasin said the statement had been misinterpreted. "It has nothing to do with outsourcing, it has nothing to do with out-shoring."
"I think he (President) got his geography wrong." The manufacturing jobs, he said, were going to Beijing.
"It is a domestic tax issue," Bhasin said.
He said the US business model was not based on a single piece of legislation and did not make business sense to base one's business on tax rates. Issues like availability of talent and markets were other factors that were counted.
Speaking on the issue, Kiran Karnik, former Nasscom head, said such a move would result in the US being the hardest hit. He said even the G-20 had pointed out that protectionism was not an option if one country adopted it, others followed.
At a time when the world economy was picking up, "Sending a protectionism signal is very negative."
According to Mittal, "G-20 has confirmed that protectionism is bad as the world has gone far and got more globalised. Protectionism is responded by protectionism."
Economies across the world, including the US, has gained a lot from reaching out to markets, he said.
"There is a rhetoric on protectionism. But most of the bills get diluted at the end," he added.
