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Outsourcing of business inevitable: Vajpayee
Monday, 01 December 2003, 20:30 IST
NEW DELHI: Indian Prime Minister Atal Bihari Vajpayee Saturday told developed countries that outsourcing of business was "inevitable" and was the result of "barriers to free movement of people" they had created.
"If people cannot go to where the business is, business will eventually come to where the people are," Vajpayee said in an address to a special plenary session of the India-European Union (EU) business summit, coinciding with the fourth India-EU political summit.
Romano Prodi, president of the European Commission, represented the EU at the summit in the absence of Italian Prime Minister Silvio Berlusconi, who cancelled his trip at the last moment citing health reasons.
"The emotive arguments about the migration of jobs to countries like India have missed two basic points," Vajpayee said.
Outsourcing, he said, increases the competitiveness and global reach of European and American companies.
"The resultant boost to the balance sheets and increased dividends payments are very much in these countries. The increased profits are also ploughed back into these economies," he said.
The second point related to barriers to free movement of people, though the demographic profile of Europe and the US necessarily meant that they would need induction of a younger work force from outside over the coming decades, Vajpayee said.
"If there is a more liberal regime of free movement of businessmen and professionals between India and Europe, this demand can be met within your countries.
"In the absence of such a liberal regime, outsourcing is inevitable. If people cannot go to where the business is, business will eventually come to where the people are," he said.
The prime minister said India hoped to replicate its known expertise in information software technology in biotechnology and other areas, driven by "our reservoir of millions of scientists, engineers, technicians and managers.
"In fact our IITs (Indian Institutes of Technology) and IIMs (Indian Institutes of Management) have today become branded products with international recognition."
And, in an implicit criticism of the European business leaders' reservations about investing in India, the prime minister said though nearly 200 of Fortune 500 companies extensively used India as a research and development base, very few of these were from Europe.
EU officials, like Chris Patten, commissioner for external relations, who are attending the summit, have publicly spoken about India's reputation of being a "hard country to do business with".
Calling for "some introspection and analysis" about India-EU trade ties, Vajpayee said while India had been careful to ensure that its liberalization measures were "non-directional" and did not target any region or group of countries, its exports were facing increasing non-tariff barriers.
Source: IANS
Source: IANS