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The use of alternate routes for traffic grooming in IP/MPLS over wavelength-division multiplexing (WDM) networks may lead to the propagation of congestion from one link to others in the IP/MPLS layer. This can be tackled by using the path inflation control (PIC) strategy proposed here for operating an IP/MPLS over WDM network in the overlay model. This supports dynamic traffic grooming with less blocking than other strategies. Network resource usage is also efficient as new lightpaths are set up for a new label switched path (LSP) request only when indicated by the congestion conditions.