India wants jobs protected
By Mark Drajem, Bloomberg News
The Seattle Times

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Friday, June 13, 2003

WASHINGTON — India wants global trade rules to counter the backlash in the United States as Microsoft, Citigroup 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 Thursday with U.S. Trade Representative Robert Zoellick. Those limitations, he said, need to be addressed in the World Trade Organization (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, D.C. "Why should U.S. industry be forced to take less-efficient services?"

Jaitley's words underscore the concern in New Delhi over rising resentment in the United States about U.S. 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 U.S. 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 $477 billion economy.

Yet growth in those services is coming up against complaints from state lawmakers and unions in the United States.

"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 U.S. economy or U.S. workers."

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, Hewlett-Packard, Texas Instruments, Citigroup and General Electric have all either opened offices in India or contracted for services from Indian companies such as Spectramind, a unit of Wipro, India's largest software maker by market value.

In financial services alone, 2 million U.S. 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 $356 billion for companies, said Deloitte Research, an arm of the Deloitte Touche Tohmatsu accounting firm.

India is the premier location because of its well-educated, English-speaking labor force, the report said.

Indian software exports grew 26.3 percent to $9.5 billion in the year ended March 31 as U.S. companies such as Citigroup tapped cheap Indian labor for computer and telephone services, according to India's National Association of Software and Service Companies.

The organization, which represents 200 Indian high-tech companies, is marketing cheap Indian labor as a boon to the U.S. economy.

"We are really highlighting how they are aiding the U.S. economy," said Sunil Mehta, the group's vice president. For example, U.S. computer companies sold $3 billion of products to India last year, group officials said.


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