Indian Business News: Will Outsourcing to India be Outlawed?

List: Posted: 12/10/10

As India takes a larger role in the world economy, its IT business is an important industry. However, American states are starting to outlaw outsourcing to India to save American jobs.

In a struggling economy, American state governments are looking for more ways to bring jobs to and keep jobs in their states, even though that means a bigger drain on local business's finances. In Ohio, the government decided to do this by denying Ohio companies the right to outsource IT services to India.

Part of the problem is the quality of services expected from Indian companies. The country does have some of the leading information technology in the world. However, it’s difficult for Americans to make IT related phone calls with non-native English speakers, making customer technical support challenging.

Of course, part of the Ohio law was to make sure more jobs stayed in state. However, Indian firms often do keep jobs in the United States. One Indian company operating in Ohio actually gets tax cuts for bringing otherwise foreign jobs to the state of Ohio.

India is able to provide cheaper workers because of a lower cost of living. For this reason, many American companies may be reluctant to cut their outsourced workers completely. Whether a federal law will pass or not remains to be seen.

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