New Delhi, Jan 29: US President Barack Obama's move to snatch tax breaks from outsourcing US companies is no threat to Indian IT, assures an analyst firm Gartner.
"There is no need for panic...Even if tax breaks are taken away, the US firms have to outsource because that makes business sense for them," Gartner senior research analyst Diptarup Chakroborty informed.
Since the overall economic and financial scenario seems to be improving, the issue of tax breaks will take a second spot for the companies.
"If the tax breaks are taken away, it is not going to impact the Indian IT industry adversely. With the global economy looking up, a lot of emerging markets are opening up. The contribution from those markets is going to offset the impact of tax breaks if any," he added.
The National Association of Software and Services Companies (NASSCOM) is also not worried about Obama threatening the US companies against shipping jobs abroad.
NASSCOM, however, feels that the real problem is 'protectionism'.
"I think the concerns that we have is about indirect protectionism. I don't think tax break issue is really the one which is important for us. Obama's comment was not related to outsourcing. It's about US companies operating in regions where they get tax benefits," Nasscom VP Ameet Nivsarker is quoted as saying in news reports.
In his first State of the Union address, Barack Obama said that creation of jobs in US remains his priority and reiterated his May 2009 advise to the outsourcing companies asking them to choose 'Buffalo over Bangalore'.
"To encourage ... businesses to stay within our borders, it is time to finally slash the tax breaks for companies that ship our jobs overseas, and give those tax breaks to companies that create jobs right here in the United States of America," he said.