New Delhi: Contrary to the general perception that India was a major beneficiary of global outsourcing, ILO (International Labour Organisation) today (Dec 3, 2004) said the country has emerged as the fifth largest economy in the world in terms of outsourcing to other economies.

"India has turned out to be the fifth largest economy in the world, which outsourced IT and business services to the tune of $ 11 billion by the end of 2003-04 to USA, UK, Germany and Japan," International Labour Organisation deputy director M Bussi said at a meeting in New Delhi.

At an ASSOCHAM (Association of Chambers of Commerce)-organised programme, he said India had spent 2.4 per cent of its GDP (Gross Domestic Product) in outsourcing of IT and services as against the US where outsourcing accounted for 0.4 per cent of GDP last fiscal, the chamber said in a release in New Delhi today (Dec 3, 2004).

The US spent $ 41 billion for outsourcing in 2003-04, followed closely by Germany at 39 billion, UK at 35 billion, and Japan at 16 billion, he said.

India was followed by China in outsourcing to other countries, which spent $ 8 billion in the last fiscal.

Regretting the trend of critically looking at outsourcing and subsequent job losses, Bussi said although it creates unemployment initially, it pays off adequately in the long-run as labour market has tremendous scope for adjusting economic distortions created through outsourcing.