In the heat of the 2004 US presidential race, John Kerry likened outsourcing to treason, Lou Dobbs harangued against it from his CNN anchor chair and the Indian outsourcing vendors were left scrambling.

Engineers to the core, their leaders fired back with data-packed PowerPoint presentations. Outsourcing is good for the economy, they said; it increases efficiency; it creates more jobs than it costs. But in the eyes of Americans, those arguments proved no match for vivid tales of laid-off software engineers.

“Telling someone who loses their job in North Carolina or Jacksonville that this is good for the economy doesn’t work,” said Phiroz Vandrevala, Executive VP, Tata Consultancy Services. 

Now as the 2008 US election starts to sizzle, the Indian outsourcing firms have returned to win Washington over as veritable insiders, slicker and better connected than ever. They have hired a former high official in the administration of President George W Bush as a lobbyist. They are humanising the issue by bringing Americans they have hired into meetings with politicians.

Play politics

They work with research firms like Brookings Institution to generate sympathetic research. They host cocktail hours on Capitol Hill. They have learned to play politics, urging members of Congress whose districts benefit from trade with India to support them on outsourcing.

And most strikingly, they have mastered the Washington art of waging proxy battles through local front organisations, which spare them from appearing to be foreigners with an agenda. They provide facts, figures and arguments to trade groups like the IT Association of America and to Indian-American political groups.

Then they watch  those groups arrange for neutral voices to champion their causes in the newspapers. “The moment Nasscom says something, it is a vested interest,” said Lakshmi Narayanan, Chairman of Nasscom. “For last few months,” he said, Nasscom decided “to provide  data, work behind scenes, but really to be fronted by local organisations.”

The Indian companies are mounting this effort out of fear that the pressures of the US presidential election will induce candidates to lash out at Indian vendors. Their business model is a perpetual lightning rod: the companies carve out tasks from their American clients and perform them more cheaply back in India or other low-cost locations.

Preparing resistence

The Indian vendors’ main worries are the Democratic candidates Senator Barack Obama of Illinois, whose campaign has flirted with anti-outsourcing rhetoric, and John Edwards, a former North Carolina senator, who is running an explicitly populist campaign.

The Indian executives believe that Senator Hillary Rodham Clinton of New York, also a Democrat, is more sympathetic to their cause, but they are concerned that she would be compelled to match the others’. “People are trying to make it an issue again,” said one Washington lobbyist who represents some Indian companies.

But Indian vendors are working on their belief that outsourcing benefits both India and the US. Nasscom has hired as its chief Washington lobbyist Robert Blackwill, a former senior White House adviser and US ambassador to India in the Bush administration.

As the President of Barbour Griffith & Rogers International, an arm of one of the most powerful lobby shops in Washington, located three blocks from the White House, he is a heavy hitter on Capitol Hill.

Making a pitch

Executives from the Indian firms visiting the US, including on a trip organised by Nasscom in May, have met with aides to all the major presidential hopefuls, Vandrevala said. Nasscom hosted an evening reception for members of the House of Representatives’ India caucus that drew 40 to 50 people, he added.

But the heart of the Indian vendors’ new strategy appears like to remove themselves from the limelight. Outsourcing is not about us, goes the new Indian mantra to lawmakers: it benefits living, breathing Americans, including ones in your district.

The Washington lobbyist said that a focus of the campaign was to collect data on Indian companies’ investments in the US, and then to lobby members of Congress from districts where those investments had created jobs. TCS for example, may be funneling some San Francisco-area technology jobs to India. But it belongs to an Indian conglomerate, Tata Group, recently acquiring the Campton Place Hotel in San Francisco and thus has hundreds of US workers on its payroll.

Customers’ voice

The Indians have also begun to use their own customers, which include the largest US companies, as proxy soldiers. Both the vendors and the clients belong to trade groups like the Information Technology Association of America, which help to coordinate lobbying campaigns in which an American chief executive will write a newspaper article or make a statement to Congress that is in his or her own company’s interest but also benefits the Indian vendor.

“We don’t want to be seen as very active there, because it can seem that India is trying to poke its nose into the debate,” said Kiran Karnik, the President of Nasscom. “We would prefer that the active effort of working the Hill is done by US companies.”A successful example of getting a heavyweight to help their case, according to the Indian companies, was recent congressional testimony by Bill Gates, Microsoft’s Chairman, in which he called vigorously for expanding the H-1B skilled-worker visa program.

Indian-American political groups in the United States are also effective proxies. The US-India Political Action Committee has defended outsourcing vendors, most of whose employees are in India. In a sign of their changing approach, the Indian vendors are also imitating a tactic used against them in the last election: putting a human, and preferably American, face on the issue.

In meetings in Washington with members of Congress and with the presidential campaigns, the Indian companies are bringing in American employees they have hired locally. The employees typically serve as liaisons between the Indian firms’ American clients and their back-office workers in India, but to the Indians, they illustrate that outsourcing can create American jobs.

Source: IHT