An article by Teresita C. Schaffer and Shilpa Rajan on the implications of the growing trend of U.S. companies outsourcing jobs to India.
Outsourcing has provided additional jobs for India and lower costs for U.S. businesses, creating winners and losers in both countries. The most interesting questions concern its impact on international production processes. Outsourcing-related sectors are among the most open in the Indian economy. Will their success encourage greater openness? The United States, with its generally open market and its array of multinational corporations, has for the past three decades been steadily integrating with the rest of the world. The same is true within individual major corporations. Regardless of possible changes to tax codes or requirements for government procurement in the United States, and barring a major depression or interruption in telecommunications services, this trend is now likely to encompass services that do not need to be rendered in person.
Originally published in the Center for Strategic & International Studies‘ South Asia Monitor on December 1, 2004. Read the entire article.