Dodging The Bullet

Given the sentiment against Indian IT firms, Nasscom was on overdrive. But its recent efforts to block the New Jersey bill banning government contracts from going abroad was seen as "naive" and self-defeating. While the hearing on the proposed bill was postponed, sources said a Nasscom representative met legislators and offered an "amendment" to water it down. So, was Nasscom endorsing the bill, even as others were trying to get it shelved? "Nasscom didn't do its homework. We just dodged a bullet," said a source monitoring the bill's progress.

Michael Clark, US Chamber of Commerce representative and head of the US-India Business Council, says the bill must be countered on grounds that it's unworkable, goes against the spirit of trade being a two-way process, and is unconstitutional. "We don't want it to become a 50-headed hydra that goes against the very nature of trade relations," says Clark. The involvement of a high-powered lobbyist, activation of the Information Technology Association of America and a US Chamber of Commerce representative from Washington finally stalled the bill.

Nasscom's Kiran Karnik explained it thus: "We knew it wasn't a business issue—since government contracts form less than 1 per cent of outsourcing contracts—but an emotional one." By arguing for an amendment, Nasscom was trying to convey it was sensitive to US concerns. Its solution: rephrasing the bill so that outsourcing would be banned only if "there was no advantage in terms of either costs or quality". Since both are proven advantages, there was no risk.