Obama II may affect outsourcing to India

A week after the re-election of Barack Obama, US ambassador to India Nancy J. Powell visited Hyderabad to spell out what his second term means for Indo-US relations.

Calling the relationship a ‘defining partnership’ of the 21st century, she said the economy would be the main challenge for Obama in his second term.

“One of the important issues is creating more jobs. As per the president’s campaign, this might affect outsourcing by introducing tax penalties for companies that create overseas jobs. However, this is a decision that has to be taken by Congress and will take time to be introduced as a legislation,” she said, answering queries by students of St.Mary’s College at Yousufguda.

Highlighting the need to enact the 23 points discussed in the US-India strategic dialogue in June 2011, Powell added that unresolved issues relating to the Indo- US civilian nuclear agreement will be addressed soon.

Commenting on the opening up of the Indian economy to foreign direct investment (FDI) in various sectors, she said, “At times, efforts by companies to provide technology and expertise to India have been mischaracterized as concessions to the West but the recent easing of restrictions on FDI have shown macroeconomic reform to be among India’s most powerful tools for growth.”

The increased use of shale gas as an alternative to petroleum was also discussed in the strategic dialogue on energy resources. The shift was aimed at persuading India to reduce its crude oil imports from Iran. Pointing to the benefits of using shale gas, Powell said, “Shale gas has been a game changer in the US. The use of Guar gum sourced from India in large quantities for extracting this energy source points on the dependence of the US on Indian farmers.”

She also highlighted the need for India and the US to work on maritime security, countering piracy and marine dispute resolution and suggested finding an alternative to American export control laws and Indian acquisition systems to facilitate defense trade.

The ambassador announced the first batch of recipients of Obama-Singh Knowledge Initiative, adding that more than one lakh Indian students were enrolled in universities across the US in the current academic year.