India's industry bodies are seeking clarification on US president Barack Obama's seemingly protectionist remarks about stopping tax benefits for companies that outsource work overseas.

CII, FICCI, and Nasscom are believed to be engaged in talks with the US government following the President's call.

"We have to wait and see how it is implemented. There is confusion on what he meant and we are waiting for clarifications," said Krish Gopalakrishnan, MD&CEO, Infosys, on the sidelines of the CII event on Friday.  

He added that this is a challenge that the industry needs to face collectively. "Protectionism will only prolong downturn and governments are aware that they shouldn't raise protectionism."

Nasscom chairman Ganesh Natarajan added from Washington DC: "We are having discussions with business councils and senators on the overall impact. There's a general mood in America that the government won't go against globalisation and there is nothing alarming."

According to Gopalakrishnan, IT companies should focus more on talent and quality in the current scenario rather than cost cutting measures.

He said, "It is the talent pool that leads us on the growth path."

He further added, "India's large pool of English-speaking engineers and cheaper wages has helped attract outsourcing. There is headroom for growth and we should not take things for granted."

Sobia Khan/ DNA-Daily News & Analysis Source: 3D Syndication