January 6, 2004 2:57 PM PST

Lawmakers urge Indian firms to hire in States

NEW DELHI--As worries mount over U.S. jobs lost to countries such as India, some members of Congress say one solution would be for Indian companies to hire U.S. workers.

Rep. Joseph Crowley, D-N.Y., who is leading a Congressional delegation to India, said Tuesday here that the United States and India must work together to ensure that the benefits of outsourcing flow to both countries. He cited the example of India-based Tata Group, which has set up an office in New York to explore the possibilities of investing in the United States.

"I am not talking about investments in the capital market, but investments in American people," Crowley said.

That kind of action by Indian companies could help forestall efforts to regulate outsourcing. Asked about potential legislative measures to guard against jobs moving overseas, Crowley said he would oppose any such efforts.

The 19-member delegation is in India to get a first-hand look at the country's high-technology industry, which has gained the attention of software and hardware makers elsewhere both for its skilled work force and for the lower costs of doing business in India. But as United States-based businesses have started recruiting in India and other countries such as China, U.S. technology workers have become fearful about losing their jobs.

America Online, for instance, has drawn criticism for looking into hiring software programmers in Bangalore, India, after having just laid off 450 developers in California. IBM, too, is under fire because of reports that it plans to ship several thousand programming jobs overseas. EarthLink announced Tuesday that it will lay off 1,300 employees and outsource the work to domestic and overseas companies. Other tech heavyweights, including Hewlett-Packard, Oracle, Google and Yahoo, have plans to hire employees in India.

"The U.S. has lost a lot of high-paying manufacturing jobs to China that are never going to come back," Crowley said.

According to one study, information technology vendors plan to boost the offshore component of their businesses from 5 percent last year to 23 percent in 2007.

Some members of the Congressional delegation said they want to see jobs flowing the other way as well.

"Jobs have been lost as a result of outsourcing. But we have to develop strategies whereby jobs will not be lost and there is a win-win strategy," said Rep. Barbara Lee, D-Calif. "For instance, many Indian companies can invest in our communities to create jobs in America. This is a viable strategy."

Researchers and others have pointed out that the U.S. economy gains not only from lower employment costs but also from the growth of overseas economies. That point was not lost on a representative of India's National Association of Software & Services Companies, or Nasscom, which sponsored the New Delhi visit.

"Just like India is a source for labor for the U.S., it is also becoming an important market for the U.S. India is the second-largest market for U.S. technology products," said Jerry Rao, vice chairman of Nasscom.

To help carry that message to U.S. lawmakers, Nasscom plans to hold its next board meeting--in March--in the United States.

The group from Congress plans to travel from the Indian capital to Mumbai and Hyderabad to attend meetings hosted by the Confederation of Indian Industry.

 

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