India wants global trade rules to counter the backlash in the US as Microsoft Corp, Citigroup Inc and other companies move computer programming, call center and other back-office jobs to India and other nations.
Indian Commerce Minister Arun Jaitley said he raised recent restrictions by states such as New Jersey to the contracting of Indian companies in a meeting yesterday with US Trade Representative Robert Zoellick. Those limitations, he said, need to be addressed in the WTO agreement being negotiated now.
"We need to get over this present aberration of states putting curbs on electronic commerce," Jaitley said at a speech to the Carnegie Endowment for International Peace in Washington.
"Why should US industry be forced to take less efficient services?" Jaitley's words underscore the concern in New Delhi over rising resentment in the US about American jobs moving overseas as companies seek to cut costs. The anger has grown as the number of Americans collecting unemployment rises to a two-decade high.
Forrester Research of Massachusetts predicts an acceleration of outsourcing will result in 3.3 million American jobs moving offshore by 2015, 70 percent of them to India, which is counting on cheap computer and related services to spur exports and curb unemployment in its US$477 billion economy.
Yet growth in those services is coming up against complaints from state lawmakers and unions in the US.
"At a time of one of America's worst economic recessions in 20 years, we see our largest companies making a conscious effort to move jobs overseas,'' said Marcus Courtney, president of the Washington Alliance of Technology Workers, part of the AFL-CIO.
"That's not in the interest of the US economy or US workers," Courtney said.
Legislatures in New Jersey, Maryland and Connecticut are all considering measures to outlaw government contracting of services from abroad, according to the union.
"There's three now, but there's going to be 40 by next year," Courtney said.
Microsoft Corp, Hewlett-Packard Co, Texas Instruments Inc, Citigroup Inc, and General Electric Co have all either opened offices in India or contracted for services from Indian companies such as Spectramind Ltd, a unit of Wipro Ltd, India's largest software maker by market value.
In financial services alone, 2 million US and European financial service jobs will move out of developed countries in the next five years to low-cost centers such as India, Russia, China and the Philippines, translating into savings of US$356 billion for companies, said Deloitte Research, an arm of the Deloitte Touche Tohmatsu accounting firm.
India is the premier location for these services, because of its well-educated, English-speaking labor force, the report said.
India has 450,000 software engineers, and provide "quality work at 50 to 60 percent of the cost," according to a Microsoft Corp presentation published on a union Web site.
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