Monday, Jan 26, 2004
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Advts: Classifieds | Employment | Obituary | National
By Sandeep Dikshit
NEW DELHI, JAN. 25. Though the United States' move to stop outsourcing of Government contracts to other countries might not immediately hurt the growing Indian IT industry, its leaders are planning to step up their campaign explaining the benefits of reducing costs through this move. The industry is already actively engaged in holding seminars and road shows in other countries explaining the benefits of outsourcing but it will now step up its efforts to ensure that the U.S. Senate's move of approving a law to ban outsourcing of Government contracts does not snowball. Several American States are mulling over similar laws and there is the danger of some of them adopting a similar measure. As of now, according to IT industry officials, most of the proposed bills in state legislatures seeking a ban on outsourcing do not have the backing of the two main parties. However, they acknowledge that the issue of loss of jobs has high emotional appeal and is being raised repeatedly by trade union leaders in both the U.S. and Britain, the two countries which have been generous in relocating their back office businesses or allocating software development work to Indian centres and companies. Therefore, the IT industry, along with the Government, will have to work on several fronts to ensure that the fear among workers in developed countries over outsourcing and the subsequent loss of jobs does not get out of hand. The Indian IT industry maintains that while the prospect of loss of jobs is real, the percentage of retrenchments due to outsourcing is a very small proportion of the annual job reallocation that takes place in developed countries. In the U.S., for example, the number of jobs lost due to outsourcing is less than five per cent of the total jobs reallocated due to economic factors. And, most of the workers who lose jobs will find reemployment within six months. Industry associations also want to point out that the growth of outsourcing in India will benefit the U.S. in several ways. Apart from helping Western companies to cut costs by employing relatively lower paid workers in India and other developing countries through outsourcing, the growth of this business will benefit American IT companies such as Microsoft, Oracle, Dell, HP or Compaq because these operations are carried out on hardware and software platforms imported from these firms, points out the Executive Director, Electronics and Software Export Promotion Council, D. K. Sareen. Besides attempting to convince people from Western countries about the benefits of outsourcing through traditional routes such as interfacing with industry association, participating in expositions and lobbying through the `India Caucus,' the industry is also contemplating new approaches. The Associated Chambers of Commerce and Industry has asked the Union Government to create a "CEO Group" from Fortune 500 companies relying heavily on outsourced services. These global industry chieftains should explain the logic to their countrymen, it reasons. Another, and stronger, view is for India to make a case before the WTO that in view of various free trade agreements, the Bill will act as a trade barrier.
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