WASHINGTON, USA: US President Barack Obama's mantra to save America from the financial tsunami is to say a big no to Bangalore and say yes to the Buffalo city.

On Monday the US President announced that he planned to end overseas tax breaks for U.S. companies that "create a job in Bangalore (rather than) one in Buffalo, New York”. Though this was one of his election promises, many corporates are not very happy about this.

Business groups warned that Obama's plan would eliminate American jobs, not add them. They said the current rules are aimed primarily at putting U.S. companies on an equal tax footing with international rivals, many of which benefit from favorable tax treatment by their home countries.

"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," Obama said at White House while announcing the international tax policy reform. He said the government would use the savings to give tax cuts to companies that are investing in research and development in America.

According to Guardino, CEO of the Silicon Valley Leadership Group, Obama's language was "not only discouraging, but divisive".

According to 'The Wall Street Journal', the White House plan has three main elements affecting businesses. It would curb corporations' ability to park their overseas business earnings indefinitely outside the U.S. and avoid U.S. taxes, a practice known as deferral. The plan would change the legal treatment of many international subsidiaries that companies have used to shift earnings into low-tax offshore havens.

And it would put new limits on corporations' ability to use offshore subsidiaries to generate unjustified foreign-tax credits.

The new tax laws are expected to adversely affect countries like India, China and Philippines, where many US companies have been outsourcing their work.

However, Indian IT major Infosys is of the opinion that the new tax proposal has nothing to do with IT outsourcing done by US corporations.

“The current proposal, as we understand, is to close corporate tax loopholes on U.S. multinational corporations and crack down on their overseas tax havens. We do not believe that it has anything to do with IT outsourcing done by US corporations,” Infosys said in a statement.