TORONTO: Under attack from anti-outsourcing groups for alleged
infractions ranging from stealing American jobs to avoiding paying US
taxes, Indian infotech companies may be looking at neighbouring Canada
to escape the toxic atmosphere being created by a small group of
anti-outsourcers .

At least three IT majors – TCS, Wipro and Infosys --have set up
operations in the vastly more congenial environs of Canada, and going
by the increasingly poisonous mood being whipped up in the US, others
may follow suit.

Over the weekend, Infosys, a company that has set high ethical
standards for itself, was target of a vicious attack in California
where it was accused of "stealing" local jobs and tax payer money.

The startling comment came from a local official and a lawmaker who
opposed Infosys seeking state tax relief under an alternative filing
methodology permitted by the California tax code.

In the dispute, Infosys, which has its US headquarters in Fremont,
California, argued that the standard tax formula computed by the state
failed to take into account that two-thirds of Infosys project work
was done offshore in India, and that there was a 9 to 1 differential
in the wages between its staff in India and in California.

Because the differential inflated its California taxes, Infosys argued
that it owed only around $ 180,000 instead of the $ 1.3 million it was
taxed over a two year period using the standard method.


The California Franchise Tax Board rejected Infosys plea, but
surprisingly, local lawmakers lashed out at Infosys even after the
verdict.


"It takes a lot of nerve to ask that (tax relief), considering the
context in which they operate," Lenny Goldberg, director of the
California Tax Reform Association, told the San Jose Mercury News,
which first reported the incident.

"They not only want to steal California jobs, they'd also steal the
taxpayers' dollars," said state senator Joseph Dunn, a Democrat
lawmaker who has submitted legislation to regulate outsourcing.

Such tone and language are increasingly being employed against Indian
companies as the US gets caught in an anti-outsourcing frenzy being
generated by a small group of unemployed techies, although experts
acknowledge that the job crisis is far more serious in the
manufacturing sector, where China and Mexico, rather than India, are
the threats to U.S.


On Sunday, a columnist for the Sacromento Bee attacked the whole idea
of offshore call centres in India on the basis of one contestable
incident. Others have raised security concerns and breach of privacy
fears with little or no basis.

In contrast to the hostile atmosphere being whipped up in the US,
Canada is far more welcoming to Indian companies. Infosys and Wipro
have both set up operations in Toronto and Windsor respectively.


TCS, one of the earliest movers into Canada, has offices in Ottawa,
Montreal and Toronto, besides a research alliance with the University
of Waterloo.

But just south of the border, a TCS office in Buffalo, upstate New
York, and its alliance with the University of Buffalo, set up with
encouragement of New York Senator Hillary Clinton is being attacked by
anti-outsourcers.

After this newspaper reported last week that the Senator had publicly
defended the TCS operation and argued that outsourcing was two-sided
and also benefited the U.S, a worried staffer called up this
correspondent after the anti-outsourcers attacked the Senator for
"defending Tatas."

Canada on the other hand is ready to roll the red carpet. "This is a
country which needs 20 million people over the next 20-30 years…the
business prospects and atmosphere is excellent," says Kris Krishnan, a
past president of the Indo-Canada Chamber of Commerce and President of
Deccan Digital Inc, a company specialising in BPO outsourcing to South
India.

Amid rising hostility towards India and Indian companies, Scott
Kirwin, who leads an anti-outsourcing movement in the US, had this to
say when asked what he would prefer if he had a choice between
companies outsourcing some jobs from US while keeping the rest there,
or pulling all of them out because of the anti-outsourcing heat: Don't
let the door hit you on the way out.


On the other side of the door, it seems, is waits Canada