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Last Updated: Thursday, 12 June, 2003, 13:23 GMT 14:23 UK
India warns US over outsourcing
By Habib Beary
BBC correspondent in Bangalore

India has warned the US and other developed countries that if they limit the extent to which information technology is outsourced it will damage their domestic industry.

Software programmers at work at Planet Asia, an Indian software company, in Bangalore, India
Outsourcing has become a huge business in India
The comments were made at a summit being held by the National Association of Software and Services Companies (Nasscom) in the southern city of Bangalore.

India's Information Technology Secretary Rajiv Ratan Shah said outsourcing was a huge international movement and that it was unstoppable.

Concerns have been expressed in the US, the UK and Germany over possible job losses as large companies increasingly outsource work to India.

Mr Shah said the choice before foreign companies was to lose a few jobs or face the grim prospect of losing all jobs.


He said some foreign companies were being driven by economic necessity to outsource some of the IT work.

Silicon Valley, Bangalore
Bangalore's has developed its own 'Silicon Valley'
Nasscom Chairman Som Mittal said outsourcing was irreversible and criticism in the West over perceived job losses was due to a downturn in economic conditions.

Some of the major companies outsourcing to India include Citibank, General Electric, American Express, Dell, Prudential, British Telecom, JP Morgan, HSBC and Merrill Lynch.

Some countries are also tightening regulations to stem flow of Indian software professionals.

Britain recently launched an investigation by the National Audit Office to look into complaints of job losses because of a fast-track visa scheme.

Som Mittal said the open door approach by the US motor industry to outsourcing had been profitable whereas protectionist policies had affected their steel sector.

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