Indian industry urged to let foreign partners tackle BPO backlash

Tuesday, 25 November 2003, 08:00 Hrs
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NEW DELHI: Indian industry was Monday cautioned against overreacting to the backlash in the U.S. against outsourcing of IT services to India.

"We should not get overly perturbed by the outcry. It is for the foreign partner to defend the economics of outsourcing move," Rajiv Ratan Shah, secretary in the Department of Industrial Policy and Promotion, told a business meet here.

The World Economic Forum and the Confederation of Indian Industry (CII) had jointly organised the three-day India Economic Summit.

"In the long-run economic argument would prevail," said Shah, a former IT secretary.

He warned industry against getting too perturbed by the backlash against outsourcing of IT services to India as witnessed by the recent cancellation of a $15.2 million contract to a subsidiary of Tata Consultancy Services by the U.S. state agency in Indiana.

With increasing number of Indian IT companies securing BPO contracts, Shah agreed with the industry stand that too much publicity given to such contracts were in fact backfiring on India.

To the industry fear of an adverse impact of high steel prices on the manufacturing sector, Shah said the government would only intervene if the volatility impacts the economic growth because steel is a major raw material.

"We would like the steel industry to address the issue of rapidly increasing prices on its own as the intervention will come when steel industry will continue to drive profitability at the cost of economic growth," said Shah.

The official assured the industry that the government was taking all steps to improve infrastructure with projects underway to improve highways, airports and ports and providing better IT linkages between all stakeholders in the exim trade.

Source: IANS
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