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John Kerry: A thorn in India's side
By Indrajit Basu

KOLKATA - When Massachusetts senator John Kerry captured the Democratic nomination on Tuesday to challenge United States President George W Bush in the November fight for White House, those who want to see change come to America may have cheered, but it has certainly raised concerns in India, which, following three years of sharing an unexpectedly cozy relationship with the Bush administration, foresees considerable diplomatic challenges in the months ahead.

Kerry has forced the country's money-spinning outsourcing industry to experience renewed worry pangs as his win, which could turn his obsessive singling out of the outsourcing of jobs to countries such as India as the principal cause for American unemployment, into a ticking time bomb. And for the country as a whole, there are other strategic concerns, such as Kerry's insistence on India signing the nuclear non-proliferation treaty (NPT); Kashmir, where Kerry's policy is not very clear; and the issuing of H1-B visas to Indians wanting to work in the US.

Already, India's back office - or business processing and outsourcing service providers - are squirming in their seats. "Part of the popular enthusiasm for Kerry in the unfolding presidential campaign stems from his promise to stop outsourcing American jobs to India and other countries," said a member of TiE, an association of Indian software outsourcing entrepreneurs. "And on Tuesday, when Kerry was crowned as the presidential nominee of the Democrats scoring a string of coast-to-coast wins, it became clear that outsourcing would become an explosive poll issue."

Kerry won the Democratic presidential nomination in a huge victory on "Super Tuesday" after sweeping nine out of the 10 states in California, New York, Connecticut, Ohio, Rhode Island, Maryland, Massachusetts and Minnesota, defeating his main rival John Edwards, forcing him to withdraw from the race. With this, the 60-year-old senator has won 27 of 30 primaries and caucuses held so far. Kerry is expected to be formally named later this summer as the party's choice to challenge President George W Bush during the November national election. Although primaries are still due in 20 states, since Kerry has no viable opponent in the fray, analysts say that Tuesday's victory makes him the only contender against Bush, and possibly, as many predict, "a sure fire winner for the president's office".

There's another reason why Kerry stands a good chance; he has the backing of most major labor unions and middle class working families for his anti-outsourcing views. Protests by anti-outsourcing factions have kicked off again with renewed vigor following Kerry's presidential nomination. In Florida on Wednesday (the day after Kerry won), reports say the fight over the export of American jobs spilled over into the streets, when, encouraged by Kerry's victory, a group of protesters chanting "stop outsourcing" trespassed into Walt Disney property to attack those attending an outsourcing conference.

On the same day, the state of Minnesota joined the group of half-a-dozen other states in the US that have introduced anti-outsourcing bills. Senator Norm Coleman introduced yet another bill before US Congress that aims to prevent federal, state and local governments from outsourcing contracts for goods or services.

There is one interesting feature in that bill though: Coleman is a Republican (like Bush), generally known for their commitment to the principles of free market, and therefore not supporters of protectionism. However, Coleman called the bill "common sense legislation".

What's more, shortly after his triumph, Kerry launched a major attack on Bush's domestic, economic and foreign policies. He also said he now wants the government to deny tax breaks to multinationals outsourcing jobs and wants the companies to notify employees and the federal labor department before moving jobs overseas.

Kerry's view on India and the nuclear non-proliferation treaty (NPT) is another irritant for the country. He has already gone on record asking India to sign the NPT, and has made his endorsement of India's claim to a permanent seat in the US Security Council conditional and half-hearted. "While I think that in may ways India would be a good candidate, there is one notable problem, India is not a party to the NPT," said Kerry. "All the nuclear powers on the council not only directly shape the NPT, but also are parties that abide by it. This may be the most serious issue with respect to India's candidacy and one that must be addressed by India."

On the issue of Kashmir, Kerry feels that India should practice tremendous restraint because there is already "enough blame to go around". Besides, India will also have to give the H1-B visa an added push because, "those who oppose the import of Indian professionals have a major voice among Democrats, whose pleas Kerry will find hard to ignore", fear many software industry experts.

The H1-B visa issue - work permits that the US issues to foreign professionals to work in that country - has become an additional irritant for India since the US reduced the number of visas issued drastically (from 165,000 to 95,000) this year, a move that has had a negative impact on India's information technology (IT) industry. India's IT sector is the highest user of these visas globally, used to send its software professionals to the US for providing outsourced services onshore.

With some 200 trade bodies, including the US Chamber of Commerce, the Business Roundtable, the American Bankers Association, the National Association of Manufacturers and the Information Technology Association of America, all of which support outsourcing, India has created a Coalition for Economic Growth and American Jobs, which has been trying to reverse this H1-B visa cut for the past few months.

Meanwhile, a section of the Indian diaspora is trying hard to contain the increasing popularity of Kerry. As reports suggest, US-based top executives of Indian IT and business process outsourcing (BPO) outfits have started boycotting all fund-raising dinners for the democratic frontrunner in the presidential election, who is privately referred to as a "BPO party spoiler" within the community.

Therefore, a second term for Bush is clearly what India favors, particularly given the improvement in bilateral relations over the past few years. But as there is the possibility that may not happen, the Indian embassy in Washington, its lobbyists, the Indian ambassador-at-large - with his political contacts across the board - and the Indian American community are all gearing up in the mean time to promote India's views to Kerry in the coming months.

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Mar 6, 2004

India readies to state its case (Mar 2, '04)

India, US up the ante in turf war (Feb 21, '04)


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