This is indeed a bad new for Indian IT industry. Now he is all set to meet his election promises as he yesterday announced the end to years of tax incentives to the US companies, which create jobs in places like Bangalore, Hyderabad, pune etc. Obama said, “It’s a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York.” All the Indian IT companies are looking worried about the whole protectionist environment off late that is happening in the US with regard to Indian IT companies.

“We will stop letting American companies that create jobs overseas take deductions on their expenses when they do not pay any American taxes on their profits, We will use the savings to give tax cuts to companies that are investing in research and development here at home so that we can jump start job creation, foster innovation, and enhance America’s competitiveness” Obama said at White House announcing the new international tax policy.

The new tax laws are expected to majorly hit IT biggies like India, China and the Philippines, where US companies have been outsourcing their software work. Bangalore is known as the Silicon Valley of India because of its preeminent position as the nation’s leading IT employer and exporter. Due to global meltdown, the Indian IT sector is already facing huge pressure and after this statement of Obama what will happen to this industry, God only knows?