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Outsourcing turns political - diplomat

Staff, CNETAsia CNet Asia

Published: 18 Jul 2003 13:55 BST

The heated debate over business-process outsourcing will soon become a political issue, and Indian authorities must come up with a plan to counter the opposition, says a US diplomat.

"There is a sentiment in the United States about job loss, but it is not substantial yet. This could well become a political problem, and India must put in place a political strategy to deal with this situation," Robert Blackwill, US's outgoing ambassador to India, told Indian daily The Hindustan Times.

Concerned about the impact on the local workforce, the report said some US states like Maryland, Connecticut and Washington are now mulling a ban on offshore outsourcing contracts to lower-cost countries like India. In addition, the New Jersey state senate has recently approved a bill that mandates that only citizens or legal residents of the US can work on certain state contracts.

"For example, if India could say it is importing close to what it is exporting to the United States and convey that it is helping in creating jobs there, the task of people like me, who support the outsourcing activity, to convince people back there will become easier," Blackwill was quoted as saying.

"From what I can see right now, imports from the US into India are almost flat", he added.

Blackwill's suggestion has already been taken up by some trade bodies in India.

For example, Indian IT association Nasscom recently published a statement to defend the offshore outsourcing wave, saving it has already led to substantial savings and productivity gains for US companies. Contrary to current perceptions of job attrition, Nasscom said outsourcing to India has improved employment figures in the US

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