The Hindu : Outsourcing is partnership, says French Minister

Online edition of India's National Newspaper
Sunday, Mar 14, 2004

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National

Outsourcing is partnership, says French Minister

By Sushma Ramachandran

NEW DELHI, MARCH 13. In the midst of the raging global controversy over outsourcing, the visiting French Industry and Energy Minister, Nicole Fontaine, has described it as a "partnership" between two countries. At the same time, she warned that it could become an issue of concern if it meant complete shift of manufacturing activities from one country to another leading to loss of jobs.

She told The Hindu that as long as outsourcing meant that companies extended their activities from one country to another, it was an acceptable concept. But she conceded that to be honest, it would definitely become a concern for her if it led to companies completely moving all operations to another country. As an extension of a company's functions, she felt the term needed to be redefined as "partnership" as it actually meant countries working together through the forum of business.

Specifically in the area of information technology, however, she was categorical that France was not really concerned about this aspect and did not expect outsourcing to India to become a threat in any way. It was only in sectors where jobs could possibly be lost by people who were not trained for any other work that it could possibly become an issue, she said.

Ms. Fontaine, who was cautious in her response to the question on outsourcing, reflected the European Union's stance on the issue which was that operations would naturally shift to more efficient countries as part of the globalisation process. In any case, as far as France was concerned, there was no large-scale move by corporates to set up call centres in India since French would have to be the medium of expression. France did have to face the prospect of call centres being set up in French-speaking countries such as Tunisia.

On the slow pace of investment by French companies, she denied that there were any major problems faced by French corporates in coming to this country. She pointed out that major players such as Alcatel in the telecom sector and Alstom, Gaz de France and Total had recently made large investments in this country. She noted that Alcatel had entered into a memorandum of understanding with the public sector ITI company for transfer of technology while Alstom was involved in the implementation of the Delhi Metro project. Gaz de France and Total, leading French companies in the oil and gas sector, had recently taken a stake in the setting up of liquefied natural gas (LNG) terminals in India.

"Therefore there are no real differences which are facing us," she said and also pointed to the fact that there was a reverse flow with Indian companies now making investments in France.

Ms. Fontaine conceded, however, that the excellent bilateral relations on the political and diplomatic fronts were not reflected in the level of economic and trade ties. She noted that there was a strong convergence of opinions between the two countries which had been clearly evident in international fora in recent times. Her visit here was, in fact, aimed at enhancing the economic and trade relationship between the two countries. During her meetings with the Information Technology Minister, Arun Shourie, she said it had been decided to strengthen ties between small and medium enterprises in the IT sector as well as in areas of new technologies.

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