Having turned a 100 days old in his Office Obama has started the latest mantra ‘Say no to Bangalore and yes to Buffalo,’. Meeting one of his major election promises, Obama yesterday announced end to years of tax incentives to those US companies which create jobs overseas in places like Bangalore. Instead, the incentives would now go to those creating jobs inside the US, in places like the Buffalo city — bordering Canada in upstate New York. If this step is concreted Indian IT and ITes companies will suffer severe losses.

Mr.Barrack Obama

However in anticipation to this problem, Indian IT giant Wipro has already made his move by acquiring some companies in Europe. There is more opportunity in Europe than America. In fact this is a good opportunity for Indian companies to expand into newer markets increasing market size and creating new markets for them.

Mr. Azim Premji

Also, other attempts by Obama to keep the money only within America might actually harm the economy more than allowing it to grow. If it tries to keep it circulating the money in only America, it is likely their export markets in countries of Europe and Australia might be affected. I feel it is a bad idea to do so.

Obama’s strategy of giving tax benefits to its American companies might have a reverse impact on his expectations. If tax benefit is less than the savings that American companies make from outsourcing to India, then it is a loss for the company. Obama must keep these factors in mind before he freezes on his decision.