23 December 2011

U.S. Call Center Bill, Indian BPOs React?

India is currently going through a phase of challenges. Inflation, economic slowdown, rupee depreciation and now adding to the pressure, is the U.S. Federal bill for call centers. A major chunk of India's revenue comes from the IT -BPO Industry and a bill to cut back its growth is a serious concern for the Indian IT industry. However, many such bills had been proposed by U.S. in the past as well. But it hardly sparked any fear then. Industry experts say, it is just another bill to add to the list of the previous ones but this time it is come with a warning.
Just Another Bill or a Warning to Indian BPOs?

On December 7, Rep Timothy Bishop and three others introduced the U.S. Call Center Worker and Consumer Protection Act which seeks "to bar corporations that sent U.S. call center jobs overseas from receiving federal grants and loans," the solon said in a statement.

Genpact, one of the top 10 BPOs in India said that it was in tune with NASSCOM and NASSCOM had stated that "We have seen attempts to present such bills in the past. However, the bill has only been introduced in the House, there is a long way for this to become legislation and for it to become law the possibility is very low. But it indicates the mindset of a certain set of policymakers and could set the tone for the next year, especially it being an election year."

"It is indeed disappointing to see U.S. adopting 'protectionist' measures like these that restrict free trade and are discriminatory trade practices. U.S. lawmakers seem to have developed the practice of unfairly taxing companies working overseas, to pay for domestic issues. In case this bill is passed, not only will it see objection from India but Latin America, Ireland, Philippines and Canada. Companies operating on a global sourcing model, building efficiencies, benefits of this get passed to the common citizen. Laws such as these will increase the cost of service and will see a rejection from common citizens."

Spokesperson: Keshav R. Murugesh, Group CEO, WNS said, "WNS has a diversified portfolio of clients that are located across the globe. In addition, WNS, being a global player, has been aggressively ramping up and opening delivery centers all around the world in order to mitigate the risks from legislation that could affect location of clients / delivery centers in a single country. WNS has also been evaluating opening of a delivery center in the United States to cater to the onshore outsourcing requirements of its clients. Notwithstanding the above, we believe that legislations such as the one recently introduced, could ultimately impact the competitiveness of American businesses."

Mphasis Spokesperson said "The new U.S. Bill seems to be a protectionist bill in with a view of the upcoming U.S. Presidential elections. At Mphasis we do not see an immediate impact in the near term. We will respond as more details emerge."

Home grown outsourcing companies like TCS, Infosys and Wipro have laid their foot print across the globe for servicing and many small startups are following their footsteps. The Indian IT Industry has given a thumbs down for the U.S. call center bill. Presently the Indian BPO is coping as the slowdown in U.S. market is curbing its growth.

"Most of the BPOs do not take any federal loans or aid. So I don't think this would create an impact on the industry," said S Nagarajan, Founder and Chief People Officer 24/7 Customer as quoted by Rediff.