In today’s fast-paced globalised economy, businesses constantly look for ways to optimise operations, reduce costs, and stay competitive. One potential strategy that has gained widespread attention is outsourcing, particularly to countries like India. But former American President Donald Trump has promised to end outsourcing if re-elected, which should sound alarm bells across India’s multi-billion-dollar outsourcing industry whose largest customer is the US. “Stop outsourcing, and turn the United States into a manufacturing superpower,” said Trump’s 2024 Republican Party Platform released ahead of the party convention next week to anoint him as the party nominee for the White House, in his third run.
The platform is a list of 20 promises that articulate Trump’s “vision to Make America Great Again in a way that is concise and digestible for every voter”, said Trump Campaign Senior Advisors Chris LaCivita and Susie Wiles. The platform was a mix of the party’s conservative agenda and populist measures. They included promises to “seal the border”, conduct the largest ever deportation programme, “prevent World War Three”, tax cuts for workers, end inflation, build the strongest military in the world, bring peace to Europe and West Asia, and retain the dollar as the world’s reserve currency.
The Indian government and businesses will be alarmed by the promise to end outsourcing, which will bring back memories of a slew of measures announced in Trump’s first term to curb outsourcing and targeting of Indian companies that dominated the outsourcing industry in the US. The administration had targeted the H-1B visa programme that American companies use to make up for the shortage of manpower available locally for high-speciality jobs.
The US accounts for an estimated 62 per cent of the business that the Indian outsourcing industry gets worldwide. India has become a leading outsourcing destination for companies in developed countries looking to leverage a skilled workforce at a lower cost. US companies that have outsourced to Indian companies include giants like Ford Motors, Cisco, American Express (Amex), General Electrics and Microsoft. It’s not unusual for the US President to rail against outsourcing and offshoring as vast swatches of the country were wiped clean of manufacturing jobs that were shipped abroad to low-wage countries in a globalised economy.
Among the countries that provide outsourcing services, India continues to lead the race. Despite threats from new outsourcing hubs springing up around the world, Indian outsourcing vendors lead the pack. Once considered a hotbed of ‘low-end’ outsourcing services like call centers, it now provides high-end services in the areas of research, design and engineering. President Joe Biden called for an Offshoring Tax Penalty in his platform for the 2020 election and former President Barack Obama called frequently and urgently for US companies to bring back outsourced jobs threatening them with tax disincentives.
