Outsourcing here to stay: Maran

The government today said that protectionist barriers against outsourcing would not survive in the face of overall economic gains and its significant role in securing high value-added jobs.

"Offshoring is bound to play an important role in securing domestic, high value-added jobs and creating new ones. Erection of protectionist barriers due to political and emotional response may not survive in the face of overall economic gains," Minister for Communications and Information Technology Dayanidhi Maran said in the OECD global forum on international investment.

"India is considered the mother of off-shore outsourcing. The big IT companies have started outsourcing their tasks because it makes it services cheaper. This is expected to encourage the spread of ICT throughout the business world," Maran said.

He said in order to maximise the gains from outsourcing, a better course of action could be to speed up some measures in an attempt to field as many winners as possible.

The minister said the liberalisation policy adopted in 1991 and foreign investments along with cooperation agreenments had resulted in a $12 billion software services export and a 70-90 per cent share of the global outsourcing market.He said the exports were expected to reach $38 billion by 2008.

Maran said apart from cost, another factor that was pushing off-shoring was availability of skilled manpower in India.

"Currently just over 5000 it graduates in Germany and 25,000 in the US enter labour market every year as against 1,20,000 in India making it a preferred country," he said.

Maran said that the indian telecom sector was also growing fast and teledensity was expected to reach 15 per cent by 2007 and this alone would need an investment of $22 billion.