A friend who had been eagerly looking to change jobs a few weeks ago told me on Friday that he plans to remain in his boring but secure job until the economic turmoil in India subsides. That was a bit surprising to me because I kept hearing that India is still fat and happy (figuratively speaking only) with all the offshoring dollars coming its way.

Every other news article I read is contradictory; outsourcing to India will grow, outsourcing to India will slow down, US will need to outsource more, US cuts outsourcing spending. But apparently things are not quite as hunky dory in India anymore either.

We all know that US companies have made a lot of investments in India, from infrastructure to people, the investments are in billions. And we also know that the economy in the US is the worse people have ever seen in the past 2 or more decades. (To hear some say it, this economic crisis is almost as bad as when the Great Depression hit.)

But even though the economy is in such a tough crisis, the US dollars is holding strong against the Indian Rupee. Not only that, wages in India continue to rise and more and more small companies are going bust due to loss of large clients or contracts from overseas. This is creating enough havoc in the minds of small and large companies depending on US work.

Also, companies like Lehman Brothers and others who are in a financial crisis are closing shop and creating job losses in the thousands. (Lehman Brothers employs more than 2500 in Mumbai, those people will be in the job market soon if not already there.)

So what will happen?

Well…. we in the US are a month and a few days from electing a new President. I think that offshoring will slow down significantly after December 2008 as the new US President tries to revive and resurrect the US economy. Regardless of who wins, and regardless of what the candidates’ state they plan to do about outsourcing, once they are elected, they will have no choice but to make some tough decisions regarding offshoring. Whether through incentives or through other means, the government will have to create local jobs. That means that the offshoring strategy employed by companies in the US is poised for some major change once we have elected a new President.

And when that happens, India will need to brace itself for a major restructuring as well…. This is of course only MY opinion and can be 100% off the mark