Party Politics and Outsourcing Policies in US:Implications for India’s IT-BPO Industry

The global integration of digital technologies has led to a radical restructuring of business strategies whereby the private companies located in the Western hemisphere particularly US and West Europe have started taking advantage of the rapidly-growing service sector in the East. In this context, a certain level of mutual dependence has emerged between US and India in the economic realm. Taking full advantages of the rapid growth of internet and long-distance communication links, India’s IT-BPO industry has assumed a leadership role in the outsourcing business.

However, after reaching its pinnacle of growth, the Indian companies that provide outsourcing services have started facing new challenges on the political front from US. The increasing social pressures against outsourcing which has been viewed as the chief cause of unemployment in the category of high-skilled, research-based IT and software services in the recent past, has manifested in strong political dissensions and disagreements between the two major political parties in US. Outsourcing emerged as a critical issue of political campaigning in the last US Presidential elections where Republicans were being held responsible for appeasing external forces at the cost of the economic interest of local employees in the IT and software industry. This research paper is an attempt to explore the political context and the consequent policy developments in US for determining the extent of business collaborations in the outsourcing segment.