Phaneesh Murthy, who heads the Information Technology (IT) firm iGATE on Wednesday said the re-election of President Barack Obama is not the best news for the Indian IT industry. Mr Murthy's statement came minutes after television networks in the U.S. projected that President Barack Obama had won re-election for a second term in the White House.
Mr Murthy, who has earlier served as a director of Infosys, India's second biggest IT services exporter, said, "Congratulations to the President for pulling off a hard fought victory. Not the best news for India or the IT outsourcing industry”. Mr Murthy is based in the U.S.
He said in his statement, "However, we need to understand how much of the election rhetoric continues into 2013 and that will determine the full implications to us. The concern over the deficit and jobs will continue and in my mind, will force the sluggishness to remain in the economy."
President Obama had adopted a tough line against outsourcing of jobs in the run-up to these elections, and had often said that he wanted to give tax breaks to companies that are investing in the United States. In his attacks on his opponent Mitt Romney, former Massachusetts governor, he accused him of outsourcing American jobs to countries like India and China. (Also read: What India Inc. says on Obama's re-election)
"There was an article the other day in The Washington Post about how Romney's former firm—you know, this is what gave him all this amazing success—was a pioneer in offshoring jobs to China and India," Mr Obama had said at an election rally in Atlanta, Georgia.
India's $100 billion IT services sector has seen a sharp slowdown in growth in recent quarters as western clients hold back on spending amid Europe's economic struggles and sluggish corporate earnings growth in the United States. The US and Europe account for over 80 per cent of revenues of the Indian IT industry.
Meanwhile, shares in Indian IT firms rose in line with the broader benchmarks. Frontline IT stocks such as Infosys, TCS and Wipro traded with gains.
(With inputs from agencies)