New Delhi: At a time when US President Barack Obama is coming down heavily on outsourcing, global financial firm Moody’s has said India will remain a top outsourcing destination.
“India will remain a top outsourcing destination because of its tech-savvy and English-proficient urban workforce whose wages are much lower than their western counterparts,” Moody’s economy.com economist Sherman Chan said.
Sherman further said that India’s outsourcing industry will certainly be hurt by this global downturn, as demand for IT support or telemarketing has weakened significantly in recent months.
However, it will recover well after the global economy rebounds, though the recovery is expected to be gradual as businesses will remain cautious with investment plans, she added.
In his first address to the joint session of the US Congress last month, Obama had stated his administration would end tax breaks for corporations that ship the US jobs overseas.
On asked whether increase in protectionism of the domestic industry in the US and the developed countries is hitting the Indian outsourcing badly, Sherman said, “I don’t think businesses leave India mainly because of protectionist sentiment.”
“A more likely reason is that activity is being scaled back in the light of a slowing global economy,” she added.
The $40 billion Indian software and BPO export industry, mainly driven by outsourcing, draws 60% of its revenues from the US.