Gopalakrishnan believes that it is up to U.S. companies and politicians to answer the following question: "What is the right balance between business efficiency, effectiveness, competitiveness and employment? It's difficult." But he suggests that the mood now seems to demand more retraining and support for those losing jobs.

During the global economic downturn in 2001 and 2002, Infosys had 2,000 employees "on bench" when there wasn't enough client work to go around. They didn't have layoffs, like so many huge U.S. companies; instead, the company "used that time to retrain them on newer technologies." But Gopalakrishnan stresses that it's the lower labor costs in India that allowed Infosys to take that approach: "That's the economics of the model. We can absorb that cost. We can retrain."

Still, some outsourcing businesses here have already felt the financial pinch of the U.S. backlash as their clients hesitate to sign new contracts, while they wait to see what the politicians do in Washington. "I would say my customers are waiting. They don't want to take a chance, at least until the election is over," says Dinesh Dalamal, who runs ISN Data Processing, an offshoring facility that does check processing in Pune. Dalamal says his U.S. clients fear "a tax on their savings." Dalamal thinks that the probability of that happening is "quite low" and such a tax would "just make a small dent in the whole thing," but the perception of the threat is real.

But no one here seems really frightened that they are about to lose their businesses over the controversy. The cold logic of a good deal works in their favor. One Indian software executive, who is employed by a multinational U.S. company with offices in Bangalore (a company that forbids employees from commenting on the record to the press on the topic of outsourcing), used an anecdote to explain why he's not really worried about the U.S. government attempting to rein in the flood of jobs going overseas.

In the early '90s, an exposé about the underbelly of the Indian software industry appeared on a respected U.S. news program. It documented the hardships of programmers brought to the U.S. on H-1B visas. Indian programmers appeared with their faces blacked out, and were quoted lamenting that their passports were being held by rogue bosses who forced them to live six to an apartment, while paying them $1,500 for work their predecessors had been paid $5,000 for. "It was very negative," the executive remembers.

Back in India, industry officials fretted about the fallout from the P.R. debacle. Should they hire lobbyists in the U.S. to plead their case in Washington? Would customers be scared away? But three months later, they found that the reaction from viewers in the U.S. was exactly the opposite of what they'd anticipated. The exposé turned out to be an advertisement.

"Suddenly, Mr. Joe sitting in Wisconsin who thought Indians were going around on elephants knew that Indians could write programs. He thought, These Indians can write programs for $1,500 that cost me $5,000? I can't believe this. I have to check this out. He didn't care that they shared an apartment." Three months after the story appeared, the software association was flooded with inquiries: "'Hey, I want to work with you? How can I do it?'"

"Americans will go for value where they see it," says the executive. "They don't care about race, religion, political affiliation. They don't care what color of shirt I wear as long as I can get them something at the highest quality at X minus what it is costing them."

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