In a bid to ensure maximum employment opportunities for local people, the US state Ohio has banned outsourcing of government-funded IT projects to other countries including India."There are pervasive service delivery problems with offshore providers, including dissatisfaction with the quality of their services and with the fact that services are being provided offshore," Ohio Governor Ted Strickland said in an executive order passed last month.
Ohio administration’s decision is a double whammy for Indian IT companies, which is already hit by the Obama administration’s decision to increase the H-1B visa fee.
The US is the largest overseas market of India’s IT industry.
With unemployment rate is running as high as 9.6 percent in the US, the Obama administration, which is facing a litmus test in November’s Congressional elections, is looking for all possible actions to create jobs.
Ohio’s unemployment rate is at 10.6 percent, higher than the national average. Foreign companies fear that other US states might also follow Ohio and ban outsourcing of government-funded IT projects.
However, analysts said this would not affect Indian companies much as they largely rely on private firms for the bulk of their business.
TCS is the only Indian company to operate in Ohio. It employs 300 people and gets USD 19 million in tax credit for creating local jobs, an Indian business daily reported Wednesday.
