India seeks to remove Western concerns about outsourcing

Wednesday, 28 January 2004, 08:00 Hrs
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NEW DELHI: India has launched a diplomatic initiative to correct the growing perception that it is "taking away jobs" from the US and other Western countries through outsourcing.

"This public perception needs to be changed," a senior official said and added this "wrong perception" could have prompted the US Senate to pass a bill banning outsourcing of government contracts to India and other countries.

The bill, awaiting presidential assent, could adversely impact India's booming business process outsourcing industry in the long term.

India's vast pool of English-speaking manpower, coupled with its educational system and training programmes, have helped transform the country into a global outsourcing superpower.

The rapidly growing IT industry has virtually turned the country into an electronic housekeeper to the world, taking care of a host of routine activities for multinational giants.

The country's IT market has grown from $1.73 billion in 1994-95 to $16.5 billion in 2002-03, accounting for three percent of gross domestic product last year and provides employment to 150,000 people.

But as global recession tightens its grip and job losses in many economies become a norm, India's cost-effective software army is increasingly becoming the envy of foreign lands.

And there has been rising protest against outsourcing of jobs.

Britain, perhaps, is the only exception because the British government was "alive to the fact that the jobs lost are not much," the official said.

London also acknowledged that more and more Indian business were investing in Britain.

Before the Senate bill, the state of Indiana in November dropped a $15.4 million outsourcing contract for IT services with an Indian software company. The move was part of an initiative launched by Governor Joe Kernan to protect local companies and jobs.

Officials said the government had already taken up the matter with the US embassy here, while External Affairs Minister Yashwant Sinha had also discussed it during his Washington visit last week.

"We would be requesting the American government how it can undo the damage, particularly when we are moving into election mode," he said referring to the upcoming Lok Sabha poll.

"The Indian government is sensitising the governments of these (western) countries on the issue," one official said.

"It is not a question of jobs going from developed countries to developing countries. It is the perception that India is taking away the jobs that we want to correct," he said, adding, "It's a negative way of looking at it."

The government is seeking to impress the developed countries that outsourcing is a "two-way street," he said and added that more jobs are outsourced to India more Indian companies tended to invest in those countries.

"We are in constant dialogue to see how we can encourage our companies to set up offices in other countries," the official said and noted the government had this month announced a series of measures to liberalise rules on investments abroad.

Source: IANS
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