Terming the backlash in the US against outsourcing to India as a "cause of concern", IT and Communications Minister Arun Shourie on Tuesday suggested a  two-pronged strategy including a "low key approach" to counter protectionist measures.

Outsourcing and India: Complete Coverage

"The backlash against Indian IT firms is an important issue. There are legislations in eight states in the US now compared to five states just three months ago, and this number is certain to go up," Shourie said while addressing a WEF-CII seminar in New Delhi.

Suggesting a "low key" approach by Indian IT industry to counter the backlash, Shourie said, "We have to modulate our response to fight the backlash".

"We need not have to fight it out everytime to counter backlash," he said.

Hitting out at the protectionist measures aimed at blocking outsourcing to cost-competitive Indian IT firms, he said, "We should co-operate with our competitors but at the same time, we should not open up in goods, if walls are set up to block access to services."

Asking Indian IT companies to reduce their dependence on the US market, which currently accounts for 60 per cent of software and service exports, Shourie said, Indian IT firms should make inroads into Germany and Japan. France and China could prove to be difficult markets for Indian companies, he added.

On the Indian industry's constant demand of increasing departmental outlay of IT spend beyond the present levels, Shourie asked companies to focus on opportunities in the defence segment, where a large amount of IT related work is being done.