A thaw in relations between India and Pakistan is expected to encourage US companies to move more technology and service jobs to India, a media report said on Thursday.
According to recent surveys US multinationals are relocating a greater number and variety of service jobs to foreign countries to save on labour costs and India has been a prime beneficiary of the trend, the Wall Street Journal reported.
The Journal further said the trend "will soon gain momentum if longstanding territorial disputes can be resolved."
But Pakistan, with its militant groups and a less educated work force, said the Journal, is not considered an attractive location for US jobs.
The jobs, once limited to call centres and other low-level work, now include stock analysis, accounting, and tax return and insurance claims processing.
"Of course corporate executives are watching this. The region will be increasingly important as businesses try to maintain costs but still grow productivity," said Rick Lazio, president of the Financial Services Forum, which represents the largest US financial companies.
Keutg Alphonso, manager of business development for Outsource Partners International, based in New York and Los Angeles, said, there were questions raised by potential clients about doing business in India a year ago when tensions with Pakistan was high.
The end of Indo-Pakistan hostilities, if it came, said Alphonso, could have a significant impact on the migration of jobs. Over the next 12 months, he said, his firm plans to boost its accounting operations in India to 1,000 employees from the current 300.
GE Capital has nearly 15,000 employees in India and plans to have 20,000 by year-end. J P Morgan Chase & Co said in April that it would hire 40 junior stock analysts and other researchers in its Mumbai office this year.
Improved relations, said the paper, would probably also boost trade between Pakistan and India, which totalled only $200 million in 2002.
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