President Obama chose to be in the
right side of economics even while enveloping his speech with political
correctness, while speaking to business leaders in India. While his
entire speech did not contain the word
“outsourcing” even for once, he called India being
seen as a destination for call centers and back-office as more of a
stereotype, and hyphenated it with the what he referred to a perception
that some people in India have about American companies being a threat
On the other hand, he chose to highlight the 20 contracts worth $10
billion that American companies have signed up during this
visit—highlighting precisely how many jobs would it create in
America: 54,000. This was clearly meant to those who see Indian
companies as threats to the American jobs. He did not talk tough on
protectionism, as many had thought he would; neither did he come with
any assurance that the protectionist measures would be
stopped—no, not even equivocally. He chose to avoid
protection of jobs altogether in his speech; instead he focused
completely on creation of jobs because of trade. That was the language
business understood best; and that is something that clearly did not
give too much of a room for India to raise the issue of outsourcing.
However, to be sure, while the speech did not have the tone of
protectionism, it did not either come with an assurance that on the
ground the measures would go away—something that the Indian
IT industry and of late, the Minister of State, Sachin Pilot has
raised. But by talking reason and logic that business identifies with,
he has pre-negated the anti-protectionism camp in India.
So, what do we take from this? Does it mean he has a changed stance, as
he did not refer to foreign companies taking away jobs? Probably not.
While on the face of it, it seems very conciliatory (and ambiguous), it
is probably meant to deflect the outsourcing item that India was trying
to put on the agenda table.
By choosing not to talk of “protecting American
jobs” the president has virtually disarmed those in India and
the US who attacked the protectionist stance of the democrats. If they
raise it now, they will be ridiculed as people creating much ado about
nothing. At the same time, by talking of creating of 50,000 plus jobs
in America, he has taken good care of people back home who see American
job loss as a big issue.
The real issues on ground remain and they would have to be
tackled—tactically by the industry with the government
support, if needed. But they do not any more fit into the agenda of
Indo-US high level talks. It has to be battled the same way as it has
been done for last six-seven years: lobbying, through American business
leaders, and so on and not by raising it with the president. The only
good news is—and that has nothing to do with the president’s
visit—is that in the House and in the Senate, there are more
Republicans after the elections. So, fighting it on the ground would
probably be a little easier.