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Now, Obama flays outsourced manufacturing

China, not India, the target shares the concerns raised, says Indian IT

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The was on tenterhooks again, as US President delivered his State of the Union speech. While Obama launched his re-election campaign by hitting out at outsourcing, this time it was mostly about getting “manufacturing jobs back” to the US.

Obama spared India in his tirade against outsourcing but announced the creation of a trade enforcement unit to investigate “unfair trade practices in countries like China”, where a large number of American goods are made.

“No, we will not go back to an economy weakened by outsourcing, bad debt and phoney financial profits. Tonight, I want to lay out a blueprint for an economy that’s built to last — an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values. This blueprint begins with American manufacturing,” he said.

He called for lower corporate taxes and incentives for US manufacturers to take foreign jobs back to America, and ending tax breaks for businesses that continue to outsource.

He acknowledged the need to create more skilled workers within the US.“I also hear from many business leaders who want to hire in the United States but can’t find workers with the right skills. Growing industries in science and technology have twice as many openings as we have workers who can do the job.”

Indian IT industry body said Obama talked about issues it had been highlighting. “The President addressed the skill shortage in the technology space in the US and the need for new partnerships between colleges and businesses. Nasscom has always maintained three-four per cent unemployment in the technology sector means a shortage and a critical theme of the speech corroborated this thinking,” it said.

Obama also addressed the need to revamp the US immigration system. “Hundreds of thousands of talented, hard-working students in this country face another challenge: The fact that they aren’t yet American citizens. Many were brought here as small children, are American through and through, yet they live every day with the threat of deportation. Others came more recently, to study business and science and engineering, but as soon as they get their degree, we send them home to invent new products and create new jobs somewhere else,” he said. He asked for comprehensive immigration reform.

Nasscom welcomed that, saying, “Various thought leaders have also been commenting on the strong need for comprehensive immigration reform in the US. The Indian IT industry consists of companies that are world class, running operations and making investments all over the world, including the US, and contributing substantially to innovation and competitiveness in the American economy. We are hopeful the positive moves towards rebuilding America will bring the desired results.”

"I think the focus of the speech was creating jobs in the US, bringing back manufacturing jobs and incentives for creating jobs, which I think are all fair demands. From an IT industry perspective, I think it is a zero-impact speech. It is in some way positive, too, as he has spoken about giving incentives to firms that would create jobs locally," said Ganesh Natarajan, Vice Chairman and MD, Zensar Technologies.

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