Britain defends outsourcing to India

BANGALORE: Britain on Saturday defended outsourcing of service jobs to low-cost nations like India but called for bargain-free two-way trade to allow Britain access to non-liberalized local businesses.

British Foreign Secretary Jack Straw, who discussed trade issues with Indian Commerce Minister Arun Jaitley on Friday, ruled out bargaining with India to improve market access.

"What we want is a combined commitment to free trade, but we are not getting into bargaining," Straw said after delivering a speech on increased Indo-British trade relations in the Indian technology hub of Bangalore.

Britain was keen for trade access to firms in accounting and legal services and import of scotch whisky, he said.

Straw said domestic media in Britain had focused on loss of jobs in back-office work like call centers to India, but failed to mention that inward investments had also created jobs.

"We are also realistic about the scale of all this (outsourcing)," Straw said, noting there were as many as 400,000 call center jobs in Britain.

He was speaking two days after a trade union said a decision by Britain's National Rail Enquiries to move half their call centers to India was likely to wipe out 800 jobs in that country.

Straw said some of the non-tariff barriers to trade in services in India came not from the government but domestic professional associations opposed to free entry.

"This has to change," he said.

British trade unions have led protests against the loss of back-office jobs to India, where English-speaking graduate workers can be hired for a fraction of those in western economies, while cheap bandwidth aids communications.

© Reuters