For some reason, it’s felt that Democrats are against outsourcing. John Kerry during his presidential run in 2004 made a few remarks to give such an impression. More recently, on May 4, President Obama said he would end tax concessions for companies that create jobs in Bangalore than in Buffalo. This is what he said (source):

It’s a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York.

 This was interpreted in some quarters in India that the US was planning to ban outsourcing. What Obama actually meant was companies shipping jobs to outside should continue be on a par with companies that did not shift jobs outside. Quite fair. If at all there was to be any tax breaks, it should have been for companies that kept jobs in the US itself. How the US came to have this tax code is amazing.

Tax or not tax, no government will be able to ban outsourcing. Its benefits from the business point of view is all too well known. On May 7, three days after Obama made that remark, Honeywell CEO David Cote made a statement during his visit to Bangalore that his company was able to grow this far only because it could ship its jobs to places like Bangalore. (Source)

Now comes another interesting bit of news. A French textile firm has told nine of its workers that they should either shift to Bangalore or stand to lose their jobs. Worse, while they are in Bangalore they will be paid just 69 euros a month, while the French average salary is 1,321 euros a month. The company has made this offer as part of a legal requirement that staffers facing layoff be offered alternative jobs. (Source).