Outsourcing of jobs to India presents no threat to the American economy, according to India's Ambassador to the US Lalit Mansingh.

Outsourcing accounts for a paltry 200,000 American jobs while the country boasts of some 138 millions jobs, he said at the Joan Kroc Performing Arts Center in San Diego last week.

"There is no need for panic," the Union-Tribune Journal quoted him as saying. "By helping the US companies to reduce their labor costs while maintaining productivity, outsourcing helps the US economy become more efficient."

Outsourcing, he said, is not a zero-sum proposition for the US, but "a win-win situation for both countries".

US companies have spent $7 billion on outsourced work in India, including software engineering, data entry and customer service operations, he said. Those companies, he added, have saved $26 billion in the process.

N Gregory Mankiw, chairman of the White House Council of Economic Advisers, echoed Mansingh's thoughts last week. "Outsourcing is just a new way of doing international trade," he said. "More things are tradable than were tradable in the past. And that's a good thing."