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India Seeks to Counter Possible Backlash on Migration of High-Tech Jobs - 2004-01-18

India is asking Asian countries to resist a potential backlash in developed nations as Western companies move technology jobs to India and other low-cost destinations.

India's Communication and Information Technology Minister Arun Shourie wants Asian countries to work out a common strategy to counter growing public concern in Britain and the United States about job losses overseas.

He was speaking in the southern Indian city of Hyderabad at a recent meeting of Asian information technology ministers.

In recent years, multinational companies have been moving work such as customer support, software research, design and development to cheaper destinations. More than half of all Fortune 500 companies say they are expanding their development centers outside Western countries.

Much of this work is flowing into countries such as India, China and the Philippines, where skilled technology workers are available for cheaper wages.

In Britain, the flight of jobs has sparked heated debate and protests by labor unions. Several states in United States are considering legislation to protect local jobs.

India is worried by what it sees as an emerging protectionist trend.

Mr. Shourie says Western countries should not expect developing countries to open their markets if they erect barriers against outsourcing.

Officials from countries such as Israel and China also say there should be no attempts to restrict the international flow of jobs in a world trying to liberalize trade rules.

The head of India's National Association of Software and Service Companies, Kiran Karnik, says India is anxious to protect the advantages offered by its skilled and cheap workforce.

"Whereas some countries have natural comparative advantages in goods, some countries like India have advantages in services, and in the process of negotiations in places like WTO [World Trade Organization] we should make sure these interests are balanced," he said.

Mr. Karnik also says more jobs will be created in Western countries as outsourcing helps companies save money.

"And if anything the process of outsourcing, which is one that increases efficiency, and brings in more profits so that they can be reinvested in creating other jobs and growth opportunities," he added.

Western companies have hired nearly 200,000 Indian workers in recent years to handle much of their customer support and software operations. The figure is expected to increase to one million by 2008.