The Toronto edition of Metro International newspapers/Toronto Star reports that 'more Indian companies are opening back doors into the United States by setting up shop in Canada.'

The practice is called nearshoring.

"There are some (U.S.) customers who feel a great affinity to the Canadian market," said Ramalinga Raju, chairman of Hyderabad-based Satyam Computer Services Ltd., India’s fourth-largest computer services firm.

Raju, visiting Satyam’s Toronto-based Canadian headquarters yesterday, said in an interview that Canada is a unique market because of its proximity to the largest economy in the world and its ability to easily assimilate global talent.

"This country, in many ways, shows the experience and an ability to respond to market situations, in some instances even better than the U.S. itself."

Canada is one of several locations targeted by Satyam as "near-shore" or "near-sourcing" opportunities. The company has also set up software centres in Australia and China, is getting into Malaysia and Hungary and is considering moves into Mexico and South America.

With the 2004 U.S. presidential elections set to take place next week, labour practices like outsourcing, offshoring and nearshoring are hot political issues.

The U.S. Democratic Party presidential candidate, Senator John Kerry has promised to create incentives for U.S. companies that resist the outsourcing trend. He has said that he would close any tax loopholes that make it advantageous to outsource call centers to developing countries like India.

Canada would not necessarily be exempt from that legislation and is understandably making the Canadian outsourcing industry nervous.

Outsourced software jobs move north | Toronto Star (2004.10.27) (registration required)