Bush asks India to open up further

US president backs outsourcing, says America is against protectionism.

President George W Bush today asked India to open up further for US business interests, even as he sent out strong signals in support of outsourcing by American companies to low-cost destinations like India.

Addressing a gathering at New Delhi's historic Purana Qila in the evening, Bush said India needed to raise foreign direct investment caps across sectors and open its market for American firms and industrial products, as well as services.

While interacting with entrepreneurs at the Indian School of Business (ISB) in Hyderabad earlier in the day, Bush said his government would welcome competition in step with globalisation.

"America will reject protectionism," Bush said, adding, "People do lose jobs as a result of globalisation. There are two ways to address the problem "" either to restore our protective walls or to educate citizens to get other jobs in the 21st century."

But, while speaking in New Delhi a few hours later, he said that India would need to reciprocate. "While we will not succumb to protectionism, India also has a responsibility. It should lift caps on FDI and open up its markets for American agriculture products and services."

In Hyderabad, Bush indicated that the US could make things easier for Indian information technology companies in the future.

Replying to a question on sanctions on accessing American technologies such as sensitive electronic chips, Bush assured the audience at the ISB that his government would constantly review the export control list as the relationship between the US and India deepened further.

During the ISB interaction, Bush is also learnt to have indicated that the US may ease H1B visa restrictions. At present, the cap on the number of H1B visas is 65,000 for knowledge workers and India Inc has been urging the US to relax this limit.

The US government has also agreed to set up a consulate in Hyderabad. It entered into an understanding with the Indian government for the proposed consulate which would come into operation from October 2007, Andhra Pradesh Chief Minister YS Rajasekhara Reddy said.