Indian companies learn the Washington lobbying game

By Anand Giridharadas
Published: August 15, 2007

MUMBAI: In the heat of the 2004 U.S. 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 many 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, an executive vice president at Tata Consultancy Services, one of the largest Indian vendors, who serves as an in-house Washington strategist for Tata and other Indian firms.

But if four years is a lifetime in Washington, it is an eternity in Bangalore. And as the 2008 U.S. 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 humanizing the issue by bringing Americans they have hired into meetings with politicians.

They work with research firms like the 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 organizations, which spare them from appearing to be foreigners with an agenda. They provide facts, figures and arguments to trade groups like the Information Technology Association of America and to Indian-American political groups. Then they watch as those groups arrange for seemingly neutral voices to champion their causes in the newspapers or before Congress.

"The moment Nasscom says something, it is a vested interest," said Lakshmi Narayanan, the chairman of Nasscom, a trade group that represents the Indian outsourcing industry. "In the last few months," he said, Nasscom decided "to provide the data, work behind the scenes, but really to be fronted by the local organizations."

The Indian companies are mounting this effort out of fear that the pressures of the U.S. presidential election, and of the Democratic primary especially, will induce candidates to lash out at the 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.

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' statements in a tight contest.

Meanwhile, new Democratic majorities in Congress have swept into office on a wave of anti-free-trade rhetoric. To the Indian firms, a recent attempt in Congress to crack down on skilled-worker visas underscored that a storm is gathering.

"People are trying to make it an issue again," said one Washington lobbyist who represents some of the Indian companies and spoke on the condition of anonymity because of company rules.

But if the anti-outsourcing movement rouses itself again, it will find itself jousting with a changed foe. The Indian vendors have in no way strayed from their belief that outsourcing benefits both India and the United States. But they have found smoother ways to get the point across.

Vandrevala, the Tata Consultancy official who also works for NASSCOM, described 2004 as "a fantastic learning experience."

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