Feb

17

US president Barack Obama labels American companies as “tax evaders” for having their business operations in India to save themselves from having to pay business tax.

Indian companies appear to have the US president’s fiery ire once more.

“However,if you are a multinational and you are investing in India, and your workforce is in India, and your plants and equipment are in India, but your headquarters are here, you are taking deductions on all the expenses in India, but you are keeping your profits outside the US; and that just doesn’t seem entirely fair.”

— Barack Obama, US President during an interview with Bloomberg Business Week.

However, Kris Gopalakrishnan, CEO and MD of Infosys believed that the US President’s remarks were aimed at US companies having business operations in multiple countries, not outsourcing to India.

“What [Obama] is talking about is US companies setting up operations outside US. Not about outsourcing to India. That is very clear. But it is not about us as far as I can see.”

— Kris Gopalakrishnan during a conference on Public Private Partnership for Internal Security-Vision 2020.

I think personally Mr. Gopalakrishan should SEE the content of the Interview of President Obama. In the excerpt above, we could at least count 4 mentions of India by the US president.

If President Obama was indeed lashing out on US multinationals having operations on any country other than the US, he could have said “you are investing in United Kingdom, and your workforce is in China, and your plants and equipment are in Germany, but your headquarters are here, you are taking deductions on all the expenses from your many bases of operation…” et cetera.

I think President Obama is building up on something, like talking himself into enforcing certain possible policies that might effect the expected rise in outsourcing services revenue this year. Best to watch on this.

References:

  1. “Obama targets outsourcers again, labels them tax evaders.” 12 February 2010. The Economic Times of India. Accessed 14 February 2010. Link Here
  2. “Obama’s remarks not aimed at Indian companies : Infosys chief” 14 February 2010. The Economic Times of India. Accessed 14 February 2010. Link Here

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