Strategic CIO // IT Strategy
Commentary
7/18/2005
01:22 PM
Paul McDougall
Paul McDougall
Commentary
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U.S. Needs India For More Than Just Outsourcing

Today's meeting between President Bush and Indian Prime Minister Manmohan Singh in Washington provides an opportunity for a big picture look at India's growing importance to America. What's quickly apparent is that efforts to limit the outsourcing of IT work to that country would be damaging to U.S. interests.

Today's meeting between President Bush and Indian Prime Minister Manmohan Singh in Washington provides an opportunity for a big picture look at India's growing importance to America. What's quickly apparent is that efforts to limit the outsourcing of IT work to that country would be damaging to U.S. interests.As India's economy grows, thanks in part to its booming IT services sector, so too does its purchases of American products. In 2004, U.S. exports of goods and commodities--that's everything from agricultural equipment to Boeing's jet airplanes--increased 22.4% to $6.1 billion, according to the Indian embassy in Washington. And in the first quarter of 2005, U.S. exports to India jumped 50% year-over-year. The upshot: Indian businesses and consumers are increasingly spending the money they earn from outsourcing on American goods and services.

But India's importance to the U.S. goes beyond trade. As the world's largest democracy, it is a crucial ally in the war on terror. The two countries participate regularly in a number of joint counter-terrorism programs, including the India-U.S. Cyberterrorism Forum. Future efforts will include workshops in Delhi and Washington and scientific exchanges.

India and the U.S. are also cooperating on conventional defense. Last October, about 2,000 Indian and U.S. Navy personnel took part in exercises--dubbed Malabar 04--off India's Southwest coast in an effort to coordinate naval activities in the region. A politically stable, economically sound and militarily capable India provides this country with an important counterweight to China's growing influence in Asia and globally.

All this comes amid new government statistics that show that tech employment in this country is now at its highest level since before 9-11, hardly an indication that offshoring is destroying the U.S. IT labor market, as some critics suggest. It's hardly surprising, then, that President Bush on Monday referred to the U.S.-Indian relationship as one of "vast potential" that should be encouraged to flourish.

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