India sees sense in lobbying America
By Siddharth Srivastava
NEW DELHI - Although United States President Barack Obama has decided to impose
new regulations to reduce the influence of lobbyists, India has other ideas.
Senior official sources told Asia Times Online that New Delhi has given the
go-ahead to India's software sector to further engage and deepen the services
of lobbying firms to push its case in the United States. Although government
permission is not required, New Delhi has been in the loop, given the political
hue that such efforts acquire.
Sources say that at least two well-connected professional firms are being
considered, with one already on the payroll for some
time and the Indian Embassy in the US providing the diplomatic backing.
A team from India's software lobby group, the National Association of Software
and Services Companies (Nasscom), is scheduled to head to the US this month,
followed by two more visits. Among the lobbying firms being considered are BGR
Holdings Llc (formerly Barbour Griffith and Rogers Llc), Rand Corp and Hill and
Knowlton Inc.
India's information technology (IT) sector is in the midst of its biggest
crisis yet due to the Satyam accounting fraud scandal, recession and job losses
in the US market, compounded by murmurs of anti-outsourcing sentiment in
America.
To prevent a political and business backlash, sources say that New Delhi has
advised a global diplomatic and business offensive to push Indian firms to
adhere to sound corporate governance, following the illegal siphoning of money
by promoters of Satyam, India's fourth-largest IT firm.
But Indian industry and the political leadership are not certain how the
policies of the Obama administration towards outsourcing will finally pan out.
Washington is under tremendous pressure to deliver America out of the
recession.
Though a supporter of the India-US strategic partnership, the joint fight
against terror and the US's civilian nuclear energy deal with India, Obama has
been quoted on the campaign trail: "Unlike [Senator] John McCain, I will stop
giving tax breaks to companies that ship jobs overseas, and I will start giving
them to companies that create good jobs right here in America."
Reports quote Obama as referring to the Convergys call center and office in
Gurgaon (the IT hub adjoining national capital Delhi) as a threat to American
employment.
While the statements may have been made in the heat of political debate,
India's IT and back-end business and process outsourcing (BPO) sectors are not
taking matters lightly. The bulk of the revenues and clients of India's US$40
billion IT and BPO sectors comes from the US market.
There has been some relief due to the appointment of Hillary Clinton as
secretary of state. Both Hillary and former president Bill Clinton have close
associations with the rich non-resident Indian community in America, which has
been espousing the cause of India-US business interests.
However, times have been hard due to the US subprime crisis and subsequent
recession. The Indian IT sector that clocked 30% growth in 2007 has dipped to
20% in 2008 due to the economic downturn. Nasscom said that the 2008-2009
figures could turn out to be lower.
Another recent dampener has been the World Bank blacklisting of Indian IT firms
Satyam, Wipro (India's third-largest IT firm) and the relatively smaller
Megasoft Consultants, "in the interest of fairness and transparency".
Satyam has been debarred for eight years while Wipro has been banned for four
years for "improper benefits to bank staff".
India lobbies hard
India has had some experience with the influence that lobbying firms can wield
in the American decision-making process - including with senators and the US
Congress - in the leadup to the landmark India-US civilian nuclear energy deal.
India's neighbor Pakistan has a longer history of turning political opinions
via lobbyists, evident by the US aid and military largesse that flowed over
time due to its role as a bulwark against the former Soviet Union during the
Cold War.
However, given deepening India-US relations in the past few years, India has
been learning the ropes quickly, ironically helped by Pakistani bureaucrats who
interacted with Indian counterparts as relations between the two countries
thawed due to the peace process. (The situation has changed following the
Mumbai attacks.)
The Indian Embassy in Washington signed up at least two lobbying firms to sell
the nuclear deal under the erstwhile George W Bush administration, spending
almost US$1.5 million annually.
This has included a contract with the Republican-leaning Barbour, Griffith and
Rogers, an outfit led by Robert Blackwill, US ambassador to India from 2001 to
2003 and an advocate of closer India-US ties.
According to official documents filed with the US government, the Indian
Embassy also paid for the services of Venable, with former Democratic senator
Birch Bayh of Indiana as its point man, given the bi-partisan support needed.
These efforts were complemented by the US-India Business Council, which engaged
the politically well-connected Patton Boggs law firm to lobby lawmakers. Boggs
is considered one of the leading and most expensive lobbying firms in
Washington.
The organization, known for its apparent Democrat standings, is supposedly now
being retained by New Delhi to promote its cause in Washington, given the
Obama-led Democrat government. The firm is led by Graham Wisner, a brother of
former US ambassador to India Frank Wisner.
Sources say that after the Mumbai terror attacks in November that left nearly
200 dead, it was aggressive lobbying efforts that went some way towards the
United Nations resolution unanimously condemning the attack and praising
India's restraint.
One of most persistent and subtle efforts to cajole the US on India policy
matters has come from the Confederation of Indian Industry, which represents
some of India's most profitable and biggest companies and is reported to have
spent millions of dollars on lobbying efforts.
The process has picked up pace over the past five or six years, even as the
emerging India growth story has developed momentum and India-US business,
strategic and political interests have converged. India, however, still
considerably trails Pakistan and China, with the former employing nine lobbying
firms and the latter 13.
Siddharth Srivastava is a New Delhi-based journalist. He can be reached at
sidsri@yahoo.com.
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