BANGALORE, India, (AFP) - Democratic hopeful John Kerry has made the flight of US jobs overseas a key theme of his election campaign but Asian nations expect the outsourcing trend to continue even if he wins, analysts say.
India heads a pack of Asian nations including the Philippines, Malaysia and Singapore where US companies have farmed out work ranging from airline ticketing to payroll processing due to cheap skilled labour.
In his campaigning, Kerry has promised sweeping reform of international tax laws in order to prevent jobs moving to Asia and Latin America and has vowed to create 10 million jobs in four years.
His plan would eliminate all tax breaks that encourage firms to move jobs overseas and use the savings to encourage companies to create employment in the United States.
But Indian IT industry officials and analysts have dismissed the concerns as campaign "rhetoric" which would die down once the elections are over.
"In an election year all the political parties go through rhetoric," said Kiran Karnik, president of India's top IT trade body, the National Association of Software and Service Companies (NASSCOM).
"If you know the track history of Senator Kerry he is a supporter of free trade. Kerry must address the issue of unemployment and job-creation (but) his focus will not be at our cost," Karnik told AFP.
"Recent research has shown that job loss due to outsourcing in the US is very small and it benefits all the corporations who outsource," he said.
A study by economic research firm Global Insight for the Information Technology Association of America, a high-tech trade group, said recently even though some IT jobs had been moved offshore, the net result was a gain of 90,000 jobs for the overall economy in 2003.
S. Nagarajan, co-founder and chief executive of 24/7 Customer, one of India's largest outsourcing firms employing 4,000 people, said vendors were not looking at a large chunk of outsourcing work from the US government but expected the flow to continue from the private sector.
"The US being the epitome of capitalism, outsourcing work will not be curtailed. It is a passing trend which will go away (after) the elections," Nagarajan said.
Mukul Aggarwal, vice-president of Unisys India, a subsidiary of US-based Unisys Corporation which has started a software development and outsourcing centre in the technology hub of Bangalore, echoed Nagarajan's views.
"To a large extent it is rhetoric. We believe it will all die down once the elections are over," Aggarwal said.
"The US is the biggest votary of free trade and free economy. They just cannot close the tap," he said. "The other fact is that in the US there is a shortage of trained manpower.
"Long-term demographics is in favour of India and China," Aggarwal said.
According to Forrester Research, in the next 15 years more than three million US jobs, representing 136 billion dollars in wages, will be moved offshore.
India, which accounts for about 80 percent of the global outsourcing market, has the largest pool of English-speaking trained labour outside the United States.
It churns out more than two million graduates every year, about 200,000 of them with engineering degrees. Many are willing to work for a fraction of the wages being paid to their US counterparts.
In Singapore, the government has stated it has a "neutral" policy on outsourcing while a global survey by US consultancy firm AT Kearney listed Malaysia as the third most attractive offshore location in terms of cost and skills behind India and China.
India's Finance Minister Palaniappan Chidambaram last week said the outcry among some Americans against firms outsourcing business services to India was "highly exaggerated" as the United States stood to gain far more than it did to lose.
"For every dollar that is outsourced by US business to India, the US insources at least 10 dollars of business from India," Chidambaram said.