The debate over whether offshore outsourcing of IT services is bad for America could snowball into a trade spat between the US and India as politicians and legislators in both countries face a national election year. The rhetoric has become sharper and angrier on both sides.
In late January the US Senate approved an Appropriations Bill that restricts offshore outsourcing of work contracted out by the federal government. India’s IT minister Arun Shourie promptly decried the bill as a move against free trade. Media reports say around 15 states in the US are considering similar bills against what is now being called ‘offshoring’. On February 16, India’s commerce minister Arun Jaitley took up India’s concerns on the issue with visiting US trade representative Robert Zoellick. Mr Jaitley rapped the US for its ‘double standards’ because it pushed other countries to open their markets while protecting its own market and jobs. Mr Zoellick, in India on a tour to find ways to restart the stalled WTO talks, said trade is a two-way process, and urged the Indian government to open up access to the agriculture and services sectors.
