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India singled out as US outsourcing debate hots up

Sep 10, 2008 09:12 PM IST India India

Minneapolis: The rupee's slide spells good news for Indian tech majors, but statements from Democrats in the US may leave them worried. At the recent Democratic Convention in Denver, former Virginia Governor Mark Warner singled India out as the destination of jobs outsourced from America.

And the Democrats have stepped up the rhetoric on this issue

An important part of the Democratic Party's platform under Barack Obama reiterated during their recent convention in Denver that they would like to generate jobs that stay in America and cannot be outsourced.

However, Republican supporters of John McCain warn that economic ties with India could suffer under this agenda.

Republicans in Minneapolis for their Convention have pointed out that the Republican agenda, with its focus on free trade, favors india. But labor union and Democratic supporters insist the talk against outsourcing is mainly targeted at manufacturing, not the kind of hi-tech jobs currently going to India.

US Commerce Secretary, Carlos Gutierrez says, "Our trading relationship with India has grown substantially over the last few years. We need to keep that going. It would be bad for the US and bad for the world if the US were to isolate itself economically. And that's one area where there is a significant policy difference between Senator McCain and his opponent."

American labor unions like AFL-CIO in Minnesota are actively working to elect Obama and can be expected to gain more clout with a Democrat in the White House. But union members say their main grouse is not against India.

AFL-CIO's Diane O' Brien says, "I can speak for Minnesota where we've lost over 50,000 jobs in less than eight years to outsourcing. But most of those jobs have actually been outsourced to countries other than India. Nor do I feel that India is being unfairly targeted."

The Democrats' rhetoric against outsourcing puts Indian-American Democrats like Rakesh Sharma, a Minnesota business owner with operations in both countries, in an awkward position. But he believes outsourcing of hi-tech jobs to India will continue.

Rakesh Sharma who is the Chairman and CTO of RadScribe says, "These days people understand about outsourcing to India and so forth, but the fact is that a lot of hi-quality resources that are available in India are not available over here and at the price they are available in India. So I'm not that concerned. I'm a Democrat, I'm going to vote Democrat, I'm not worried."

The most visible signs of outsourcing are to be found in the manufacturing sector, where shuttered factories and laid off workers tend to raise passions. India is not a big beneficiary of this trend.

But the political rhetoric, mostly from Democrats, is singling out India as a major destination for outsourcing, perhaps because the more high-profile, high-paying jobs are going there.

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