Too early for an impact, saysIndia Inc.

Barack Obama's big plan to end tax breaks for firms that ship jobs overseas has sparked concern across the outsourcing industry.

Though it may be early days to know the exact numbers pending the final bill and its clearance by the Congress, the fear and anxiety are nevertheless palpable. However, many feel the move could hit America itself rather than outsourcing or offshoring to India.

"Policies of protection will only hinder the revival of the world economy," said Suresh Senapaty, executive director and chief financial officer, Wipro Ltd.

"It is a statement of directional intent and all depends on the bill that is passed by the Congress. But as of now there is no cause for great concern," Nasscom chairman Ganesh Natarajan told DNA from the US.

But then others like TV Mohandas Pai, member on the board and director-human resources of Infosys Technologies feel IT outsourcing is the least of Obama's worries. "Over 600,000 US jobs are being lost every month and reviving the manufacturing sector there is the target," he said.

Further, if IT offshoring was really the target, then Obama has perhaps got his math wrong, said an IT company chief.

"There is a huge cost arbitrage advantage for US companies offshoring to India and that would any day outweigh the loss on account of tax incentives foregone," he said. According to an industry analyst the additional cost per employee if Obama were to remove the benefits would total to $1500-2000.

On an annual average cost per employee of $50,000 the loss is negligible and offshoring would nevertheless continue.

This apart, according to Kiran Karnik, former Nasscom president and currently chairman, Satyam Computer, offshoring will continue because of operational efficiencies and not just the cost advantages.

C Chitti Pantulu & Amit Tripathi/ DNA-Daily News & Analysis Source: 3D Syndication