We will block protectionism: Geithner assures India

Thursday, 08 April 2010, 21:37 IST   |    16 Comments
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We will block protectionism: Geithner assures India
New Delhi: Realizing that India's IT outsourcing sector battles to create jobs at home in the worst labour market since the Great Depression of the 1930s, the U.S. Treasury Secretary Timothy Geithner has vowed to block protectionism. During a two-day visit to India, Geithner said that protectionist measures to prevent jobs from migrating outside the country would do more harm to the U.S. than good, reports James Lamont from the Financial Times. IT outsourcing, which is heavily dependent on business from the U.S., is one of India's flagship economic sectors. Companies such as Tata Consultancy Services (TCS), Infosys and Genpact helped propel the economy to growth rates of 9 percent before the global financial crisis and was responsible for creating 45 percent of new jobs over the past 10 years. Last year the global IT outsourcing market was estimated to be worth as much as $250 billion. Geithner also said that the administration of Barack Obama, President, would not seek to curb the investments of U.S. companies overseas as "our fortunes are tied with the world". There have been proposals to trim the tax privileges of U.S. companies that operate internationally. "We are not going to go down that path," promised Geithner. We know that it would make us weaker, not stronger." "We have got the worst labour market since the Great Depression," the Treasury Secretary said. "Most Americans are still going through an incredibly difficult economic series of challenges and yet we've been very successful in working to keep our markets open under all that pressure." "Some of the sounds coming out of the U.S. have caused concerns here," said Tarun Das, the president of the Aspen Institute in India. Local businesses were wondering whether "the authors of globalisation are turning to protectionism." Senior policymakers say that the Indian economy is fast becoming more export-oriented and more vulnerable to protectionist action by other large economies. "If we want to get to 9-10 percent growth it's in our interest that the U.S. should get back to growing as soon as possible," said Montek Singh Ahluwalia, Deputy Chairman of India's powerful planning commission. "It's also important that the market remain open."

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