India edgy about outsourcing newbies?

[OhioChick]

Extends tax break hols to protect crown
Published: 6 May 2008 10:52 BST

India's fears that other countries are undercutting its dominance of the global outsourcing market have pushed it into extending a tax break for software companies say consultants.

The finance minister for India, Palaniappan Chidambaram, decided to extend the tax holiday enjoyed by software companies in the country by one year to March 2010, although this decision must be ratified by parliament.

Pierre Audoin Consultants (PAC) argues this is a reflection of nervousness about countries such as the Philippines and Vietnam, where tax exemptions are threatening to beat India on the cost competitiveness that allowed it to dominate the global outsourcing market.

It said the decision was taken in the face of hard lobbying by Indian outsourcing industry group Nasscom, which had warned that not extending the tax holiday would result in the loss of 400,000 jobs as outsourcers went elsewhere.

But the consultancy says India must be prepared to let go of the exemption and accept the short term growth shrinkage as the country's outsourcing market matures.

http://services.silicon.com/itoutsourcing/0,3800004871,39212070,00.htm

[mitchleary]

1. That would show them

Out India, India.

They will learn a valuble lesson, companies do not give a sh!t what kind of job they do, just that they are cheapest.

[Larkspur]

2. I'm so glad India is experiencing this threat

Oursourcing is proof of Jack Welch's business philosophy that corporations should be on barges that can sail from one country to another when the host country's laws and employee wages cut into the gross profits of the corporations.