In a rude jolt to Indian business process management companies (BPM or BPO), a bipartisan group of six US lawmakers on Friday introduced a legislation in the Congress to tighten the rules for American companies that outsource call centres overseas.
The US Call Center and Consumer Protection Act of 2013 requires overseas call centre employees to disclose their location to US consumers and gives customers the right to be transferred to a US-based call centre upon request. In addition, the US Department of Labor would track firms that move call centre jobs overseas and bar them from receiving federal loans and grants.
For India, home to the world’s largest BPO industry, employing some two million people and contributing roughly 2% to the country’s gross domestic product, this is a serious setback. Outsourcing from the US accounts for roughly 60% of the revenues of the Indian IT-BPO industry. What’s worse, the blow comes just as the industry is bracing for the US Immigration Bill, whose controversial ‘outplacement clause’ restricts employing Indian labour in the US, calls for setting up additional delivery centres in the US and hiring more nationals to man them at double the salaries paid to Indians.
Experts agree that the development bodes ill for India. “This clearly shows that the US is trying to shut down both onshoring and offshoring to create more jobs in the US,” said Pradeep Udhas, head of IT-BPO at KPMG.
He, however, thinks India may not be affected as much since 50% of the US call centres that require outsourcing may continue to do so regardless of the Bill.
Halo fading
According to Nasscom, in the last five years, India has lost about 10% BPO market share to other countries, most of it in the voice contract segment.
Nasscom pegs the Indian IT services industry at $50 billion and the BPM or BPO industry at around $20 billion during 2012-13. Engineering services are an additional $10 billion or so.
The annual average growth of IT-ITeS services in India was 10.9% last fiscal, from 30% five years ago. Compare this with 69% in the Philippines, 28% in Sri Lanka, 59% in Ukraine, 27% in the Russian Federation, 37% in Argentina and 35% in Costa Rica.
Source Article from http://www.dnaindia.com/mumbai/1869644/report-for-bpos-a-shocker-of-a-call-from-us
