Prime Minister Atal Bihari Vajpayee said on Friday that outsourcing to India was a 'win-win situation' for India and the sourcing countries, and that the fears of job losses in those countries were baseless.

It is natural for companies to use technology and human resources available in the international arena to enhance their efficiencies, he said.

"India had become a preferred destination for IT-enabled services companies," he added.

The prime minister was speaking at the  inaugural function of the second Pravasi Bharatiya Divas celebrations in New Delhi.

He praised the country's IT sector, saying that it had established India's technological superiority the world over.

• The Pravasi Bharatiya Divas 2004
• India and Outsourcing: Complete Coverage

He said that India recorded the fastest growth in the year 2003 and the country had started attracting best of the talent back against the problem of 'brain drain' faced till recently.

The prime minister made a special mention of the 'positive winds blowing in India's external environment.'

Observing that he has just returned from a landmark summit of SAARC countries in Islamabad, he said a South Asia Free Trade Agreement will herald a new era of trade and economic cooperation in this region.

"These, coupled with our achievements in the economic field, have palpably elevated India's standing in the world community," he said.

"This has opened up exciting new possibilities and opportunities," he said.