India’s outsourcing industry is unlikely to be stopped in its tracks by either US legislators or protestors. Only a better and cheaper rival could threaten the country’s success.

Is there a backlash against Indian outsourcing? Arrests of Indian software engineers and executives in Indonesia, Malaysia and the Netherlands; clampdowns on visas for foreign IT workers in the US; and – most extreme – plans by key US states to ban government data-processing being carried out overseas all suggest a counterattack.

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Understandably concerned, India’s commerce minister Arun Jaitley plans to raise the matter with the WTO and India’s minister for communications and IT Arun Shourie describes the country’s software business as “like a house upon a hill” that can be easily targeted.

These are tough times in the US and elsewhere and that means political pressures over lost jobs. The heat was turned up even further in May when a Bank of America software programmer in New Jersey committed suicide after losing his job.

In such circumstances, a cool head and a detached view are needed to separate real protectionism from political hot air. Without doubt, visas are set to be more strictly monitored and controlled and loopholes tightened up. US republican John Mica has introduced a bill to stop companies such as Tata and Infosys from using L-1 visas to transfer workers from their Indian headquarters to US subsidiaries and then hire them out to US companies. But let’s be honest about it: this is a loophole and was bound to be closed off sooner or later.

But more outrageous proposals – such as those of Maryland, Washington, Connecticut and New Jersey to prevent state data-processing going to overseas companies or workers who are not US citizens – are unlikely to fly. Globalisation cannot be stopped by a bunch of US state legislators any more than it can be prevented by protesters at international meetings.

The Indian software business is one of the great investment successes of the current era. Backlash or none, it will survive unless someone else can do it better and cheaper. China calling?

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