“It is Shanghai and not Bangalore that would be more affected by Mr Obama’s tax reforms,” said Mr Pramod Bhasin, Chairman, Nasscom.

Addressing a press conference on the sidelines of a Nasscom event, Mr Bhasin said that China had received more foreign direct investment from US companies than India. “Mr Obama’s tax reform has got more to do with tax breaks for US companies’ investments in overseas locations and nothing to do with outsourcing. The tax reform is going on for more than a decade. It is to do with their domestic tax policy which they are trying to change,” Mr Bhasin said.

The Nasscom President, Mr Som Mittal, said Mr Obama’s statement has nothing to do with India, but how the US companies and their subsidiaries are structured and the taxation followed by the US over the years.

Mr Obama has said that the additional taxes that he would get would be invested in research training and so on to create jobs. “I think that (creating more jobs) should be welcomed,” said Mr Mittal.

On the impact of tax issue on India, Mr Mittal said: “It is just a proposal. It will have to be converted into a Bill and there would be a lot of debates. We will have to keep handling these issues.”

Further, Mr Bhasin said some industry lobbies in the US have already expressed that they are not happy with the measures at a time when they need to grow and the best place to grow is overseas. People are losing jobs in America and there is a possibility that protectionist measures would continue till the economy recovers, he said.

“Mr Obama has a strong majority and I think he is very focused on these things. I think in some of these things they will go a long way and we should expect it,” Mr Bhasin added.

Target year extended

Further, Mr Mittal said the unprecedented slowdown in key markets such as the US and Europe has forced Nasscom to extend the target year for achieving $60 billion export revenue by three to four quarters to 2011 from 2010.

Stating that the Indian IT industry was facing challenging times, Mr Mittal said that export growth could slip into single digit for the year ahead as customers impacted by the downturn reduce their IT spends. Nasscom is expected to come out with its forecast for fiscal 2010 in June after the export data for last year is compiled.

Though the Indian IT industry faced challenges in the medium term it has the potential to grow to $175 billion by 2020, said Mr Noshir Kaka, Director, McKinsey & Co. About 80 per cent of the incremental revenue growth by 2020 will be driven by opportunities outside of the current core markets, verticals and customer segments and the industry needs to redefine its value proposition to capture that market.