Union IT and Communications Minister Arun Shourie on Friday said Indian IT companies should diversify to Europe and respond to the outsourcing backlash by expanding its markets.

"After all it is upto our companies to find ways and Indian companies know that they were to set up operations in Europe, which is a vigorous market with countries like Germany and we should diversify our exports in that regard also," he said after the meeting of the third EU-India Working Group on IT.

Brushing aside the outsourcing backlash controversy, Erkki Liikanen, EU Commissioner, said the European Union supported free trade.

"We are very open in trade. So we are supporting free trade of goods and services. When we stick to this principle, we do not have particular legislation for or against one type of services or good," he said.

TCS already has a presence in Hungary and in its offices, majority of the people are citizens and inhabitants of that country, Shourie said, adding that "this kind of a response to outsourcing fears is already visible and I am sure it will accelerate".

"It much depends on factors that transcend policies and economic progress in Europe... on our professionals and firms learning languages other than English. All these things should also be overcome," he added.

Liikanen pointed out that during his meeting with Infosys, he was told that the company was going to set up an office in Czechoslovakia.

Liikanen had said on Thursday that Europe had no plans of raising protectionist barriers to outsourcing from India but emphasised that trade was a "two-way process".