Ameet Nivsarkar, vice-president of NASSCOM feels the concerns raised by some analysts and members of the IT industry at the re-elections are "overdone". "The Democrats continue to control the senate with less than 60 seats, which is a critical mark. The Republicans control the House and we have the same President in the White House," he reiterated in an interview to CNBC-TV18.
India's outsourcing chiefs crossed their fingers that Barack Obama would take a less hawkish stance on the industry during his second term, as they cheered his re-election as a possible boost to the US economy. Obama sharpened his rhetoric against industries that move jobs out of America during his re-election campaign, and his administration has been criticised by outsourcing industry bodies in India for tightening visa rules.
However, Nivsarkar believes for President Obama's second term to be successful, he will need to urgently focus on is growth and employment. "Growth in the US will only come if American companies start growing and these are helped by the Indian industry, not only in terms of bringing in efficiencies and innovations, but also in expanding to newer geographies," he said.
Below is an edited transcript of the interview on CNBC-TV18.
Q: Just lay out your concerns with regards to the re-election of President Obama. Do you think that the concerns are overdone?
A: They are. If you look at, it not much has changed from last week. The Democrats continue to control the senate with less than 60 seats, which is a critical mark. The Republicans control the House and we have the same President in the White House. It is business as usual for the industry. In fact, if you look at 2008 when the president got elected for the first time things were much worse. There was the entire banking system failure. There was concern around the entire world going into a great depression and unemployment levels in the US and across the world where significantly high. We are in a much better situation than what we were in 2008 right now.
Q: There are fears about President Obama’s anti-outsourcing stance that may prove negative for many Indian IT companies. Last time it proved to be just rhetoric for the election purposes. Do you think it is going to be the same this time and we shouldn’t worry too much post elections?
A: If you look at it -- what does this industry do right? It helps American companies become more competitive and for President Obama to be successful in this term, what he needs to urgently focus on is growth and employment. Growth in the US will only come if American companies start growing and these are helped by the Indian industry not only in terms of brining in efficiencies and innovations but also in expanding to newer geographies.
Today, most of the customers that our industry works with are seeing more than 50 percent of their revenues coming from outside the US and that is where our industry's reach actually helps companies grow.
Q: We saw some amount of visa cost increased in the past four years. What would be the biggest fear for the IT industry which is a plausible scenario?
A: Not much has changed since last week. There continues to be a split in the Congress. From a legislative perspective not terribly concerned about something bad happening because there is no consensus on visas or immigration reform as of now. There are definitely both sides of aisle that is the Republican and Democrat side. They do have a consensus on one aspect, which is the shortage of STEM talent in the US. STEM being science, technology, engineering and mathematics and there is big concern around that. So, if there is movement on legislative bill which focuses on STEM, it will probably be in a positive perspective. It will be to increase the availability of STEM talent for the US. On the administrative front, though there are concerns that we have been voicing for some time. The visa rejection rates have been significantly high and we are working with the US government both in Delhi as well as in Washington. We are trying to resolve the situation, to see if that can be brought down.
Q: What is your guidance for rest of the year? Does Nasscom hold on to its FY13 revenue growth of 11-14 percent or you will have to scale it down because some of the IT companies like Infosys etc, reporting huge sluggishness in growth?
A: The industry is made up of a lot of companies. We should be in the guidance range, albeit on the lower end than what we had thought at the start of the year. We do not see any reason for a change in the guidance. After a year, we would definitely be in double-digit growth for sure. I do not think there is any concern on that front.