Use WTO rules to boost outsourcing: Khosla

The Number Two venture capitalist in the world Vinod Khosla has came out in support of outsourcing, saying India should use World Trade Organization rules to protect the growth of outsourcing from attacks in an election year in the US, according to a CNET News report.

Khosla, who recently slipped to second position after Promod Haque in Forbes magazine's Midas list of top VCs in the world, is general partner at Kleiner, Perkins, Caufield and Byers and is somewhat of a legend in tech circles in Silicon Valley. He is also co-founder and the first CEO of Sun Microsystems.

"It's important for India that IT services and outsourcing be part of the open trade, global trade paradigm," the India-born Khosla said

He said that the WTO is about free trade and that it is important that "some of these things that are important to us be part of those agreements".

However, he added that Indian outsourcers must also help ease the pain of job losses in the US. With over two million jobs lost since the Bush presidency, outsourcing has become the favorite target of Democrats. Khosla is a Republican, and said that since the Bush administration favored free trade, outsourcing was here to stay, according to the report.

"All I'm saying is we should minimize the negative impacts of outsourcing, and that'll help make it more acceptable," he told Reuters. According to industry estimates, Khosla has helped create firms with a combined market value of more than $500 billion.

"So, some of the (U.S.) laws that have been proposed like a 90-day notice period if jobs are being outsourced is a very good idea because it allows people who are affected in the United States to make alternative plans," he said.

Khosla said software outsourcing was now well accepted, with US-based start-ups joining Fortune 500 giants in sending work abroad, and that outsourcing had helped the US economic recovery.

"I think productivity has also improved because people have outsourced business processes, and focused a lot more on the things people focus on in recessionary times," Khosla said.