Impact of US Policies on India as Offshore Outsourcing Destination

The US suffers an unemployment rate of 9.9% which has triggered a need for several
amendments in US policies towards Outsourcing and the companies that outsource jobs to India.
Among those who outsource vastly are the giant US conglomerate GE (General Electric
Company) and IBM (International Business Machines).

Recently, the healthcare bill passed in the US led to 35 million Americans being given fresh
health insurance cover. As the Bill was passed on March 23 and was made a law on March 30,
Companies in India had turned hugely optimistic over the imminent revenue inflow that
followed. Processes like enrollment, insurance claims, transactions and customer services that
followed were to provide employment opportunities to India.

This was because Healthcare providers were forced to operate at lesser cost in providing
healthcare services to Americans. Who will convert all those paper records into electronic and
digital formats? Hence, Indians grew optimistic and had already secured contracts with major
healthcare providers to provide services. The Healthcare Bill is expected to bring employment to
Indians for the next 10 years.

On the other hand, ‘American Jobs and Closing Tax Loopholes Act’ was passed in the House of
Representatives recently which was supposed to exempt companies from certain taxes if they
generate more number of employment within the US. Citigroup, IBM and GE have been the
major gainers from their Offshore Outsourcing activities creating employment opportunities in
India.

However, predictions suggest that this is not going to affect outsourcing to India as the bill was
aimed at increasing job opportunities within the US and was not intended to curb the profits
made by these companies from outsourcing their jobs to India.

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