US Bill on outsourcing cause of concern: India

Dec 22, 2011 |

New Delhi

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India on Thursday expressed concern over the proposed US Call Centre Bill but said that it is premature to assess the impact of the decision on the domestic IT industry.

A bipartisan bill has been tabled in the US House of Representatives to make companies, that move call centres overseas, ineligible for grants or guaranteed loans from the federal government, a move aimed at stemming the tide of jobs heading to nations like India.

"Yes, it is something to be concerned about, yes, it is something to be worried about," Commerce Secretary Rahul Khullar told reporters here while releasing a report at the Assocham function here.

He, however, said that at this stage it would be premature to say anything on the possible impact of the proposed bill on the Indian industry.

Khullar said that the global economy is facing severe crisis and 'you would continuously see such things quite simply because there is a real problem all over'.

The rate of unemployment is very high in several countries like the US, Spain and the UK, he said.

"Let me assure you that if it is happening in the US, something may happen in Spain tomorrow, in the UK tomorrow ... then what you will do ... you can not be consciously worried about reactions," Khullar said.

IT industry body Nasscom has said that the proposed Bill would restrict free trade and establish discriminatory trade practices.

"It is indeed disappointing to see the US adopting 'protectionist' measures like these that restrict free trade and establish discriminatory trade practices. US lawmakers seem to have developed the practice of unfairly taxing companies working overseas, to pay for domestic issues," Nasscom President Som Mittal has said yesterday.

The Bill by Representatives Tun Bishop and David McKinley also proposes a penalty of USD 10,000 per day on US call centres, for failing to report relocation to an offshore location, within 60 days to the US Department of Labour.

Also, call centre operators who answer calls will need to identify their location and the caller will have a choice of choosing a US-based operator.

According to Nasscom estimates, the BPO export segment is anticipated to grow by 14 per cent to reach USD 14.1 billion in FY 2011.

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