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Tech Industry

Powell asks India to open its markets

U.S. Secretary of State Colin Powell says U.S. businesses should provide services to India and other countries to "offset the losses" from the offshoring trend.

Offshore outsourcing figured prominently during talks between U.S. Secretary of State Colin Powell and Indian leaders Tuesday, with the United States asking India to further open its markets.

Powell acknowledged that the trend of U.S. companies hiring overseas is resulting in a loss of jobs for American workers, but he said this could be compensated for by services that U.S. businesses can provide to other countries.

"We should focus on those (services) and make sure that we are training our young people for those kinds of jobs," Powell said, according to the transcript of a press conference in the Indian capital of New Delhi.

In his talks with India's foreign minister Yashwant Sinha, Powell discussed the need for further opening up Indian markets to both services and investment from U.S. corporations. But both Powell and Sinha said this should not be seen as a quid pro quo for outsourcing. Details of what changes might work best were discussed during recent visits by other U.S. officials to India, they said.

The shift of information technology jobs to overseas locations such as India and China has raised the hackles among trade unions and on Capitol Hill, and outsourcing has become a hot-button topic among U.S. presidential candidates. Legislators have proposed a number of bills to stem what they see as a threat to the U.S. economy.

Sen. Christopher Dodd, D-Conn., for instance, last month introduced the U.S. Workers Protection Act, which would ban offshore outsourcing in several areas of government work.

Indian politicians, meanwhile, have been stung by the criticism from abroad and have been urging resistance to protectionist measures. Powell and Sinha tried to calm the waters, saying both sides will continue to weigh this issue and that outsourcing will not be allowed to tarnish otherwise sound bilateral ties.

Counterarguments to protectionism are coming from some in the United States as well. Last week, Federal Reserve Chairman Alan Greenspan said that such laws could damage the U.S. economy instead of protect American workers.

Powell said that outsourcing was an inevitable offshoot of capabilities that the Internet and broadband technologies have made available to companies.

"That gives you the kind of outsourcing that we have seen here. We have also seen outsourcing of jobs in the U.S. to Mexico, China and to other parts of the world" as the global economy develops, Powell said. "At the same time, we hope there will be trading opportunities in other parts of the world, so that the U.S. can offset the losses."