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The Indian software industry reacted guardedly to the US Senate passing a bill banning government contractors from outsourcing, preferring to watch on how the events would unfold in the election year in the United States.
"It (the bill) will have no material impact on Infosys as we are not involved in government projects at this point. However, as an industry we have to watch the situation," Infosys Chief Operating Officer Kris Gopalakrishnan said.
"This bill concerns subcontracting work on government projects. Since the work Indian companies currently do for the US government is not much, we see the impact to be minimal," he said, even as Infosys's rival and Bangalore-based Wipro Ltd declined comment on the issue.
India's largest software power house Tata Consultancy Services, which recently lost a federal contract from the Indiana state in the US in the wake of cry against outsourcing also declined to comment.
"We won't comment on this. Let the industry body, Nasscom look into it," TCS Vice President Atul Takle said.
The bill, sponsored by Democratic Senator Christopher Dodd was approved on Thursday by a strong majority of 70 to 26, even as several Republicans criticised the idea as a 'step away' from friendly world trade with a warning that the ban might result in a backlash.
Nasdaq-listed software firm Covansys Corporation, which gets a lot of US federal government contracts and has development centres in India, said it would respect US laws and, if needed, would get the work done domestically in the US on specific requirements.
"In some cases, there may be specific requirements for business to be done domestically in the US. If not, we would offer offshore component as part of our proposals and designate as such," Covansys India President and CEO K Subrahmaniam said.
"We will do what is right for our customers without any violation of rules and guidelines," he said of the US-based Covansys which employs 2,000 software people in Bangalore, Chennai and Mumbai.
John Kerry, the Democratic US Presidential candidate, who termed US firms outsourcing to India and other low-wage countries as akin to "traitors", has emerged as the leading contender by virtue of exploiting the present unemployment situation and cry against outsourcing.
"It is the politicians who are playing the game. The best thing India should do is keep quiet. In fact, hiring of IT professionals, who earn four times than normal workers, in the US has already begun," Human resources recruiting firm Head Hunters Managing Director K Lakshmikanth said.
Agrees PeopleOne Consulting CEO Ajit Isaac said: "This is a temporary phase. In the long run, it would hurt them more than us."