New Delhi: The Government on Wednesday (Oct 20, 2004) said protectionist barriers against outsourcing would not survive in the face of overall economic gains.

Offshoring is bound to play an important role in securing domestic, high value-added jobs and creating new ones. Erection of protectionist barriers due to political and emotional response may not survive in the face of overall economic gains," IT and Communications Minister Dayanidhi Maran said.

"The biggest IT companies have started outsourcing their tasks because it makes IT services cheaper. This is expected to encourage the spread of ICT throughout the business world," he said at a conference on investment organised by Government in association with OECD (Organization of Economic Cooperation and Development) and CII (Confederation of Indian Industries).

Maran said to maximise the gains (from outsourcing), a better course of action could be to speed up some measures in an attempt to field as many winners as possible.

The Minister said India is a mother country of offshore outsourcing with a market share of 70-90 per cent and export of software and services, which stand at $12 billion, would grow to $38 billion by 2008.

Maran said apart from cost, another factor that was pushing off shoring was availability of skilled manpower in India.

"Currently just over 5000 IT graduates in Germany and 25,000 in US enter labour market every year as against 1,20,000 in India making it a preferred country," he said.

Maran said Indian telecom sector was also growing fast and tele density is expected to reach 15 per cent by 2007 and this alone would need an investment of $22 billion.