BANGALORE, INDIA: The recent move of US president Barack Obama to protect American jobs by mandating local procurement of materials has invited the question of whether this could also include contact center outsourcing.

And the move has also become a matter of concern for the Indian IT/ITES industry, which depends on the US to a large extend.

However, according to Peter Ryan, head of Contact Center Outsourcing Analysis at independent market analyst Datamonitor, there is nothing for India to worry in this front, though there will be marginal impact on the Indian IT services industry.

“India remains one of the largest and most affordable pools of talented labor globally, and it will be hard to stop clients from looking there for business support services,” he said while speaking to CyberMedia News.

“In addition, despite tax measures designed to keep jobs at home in the US, actually finding the staff to do the work at a low cost will remain a challenge, despite rising rates of unemployment in the near term,” he added.

Given the prospect of significant legal problems in legislating an outright ban on offshoring contact center work, Obama is more likely to use tax provisions to maintain equivalent domestic jobs, according to him.

“In the IT services / BPO space, it is most likely that Obama will use tax credits for companies to keep jobs onshore. In the case where the federal government is the client of outsourcing services, he may mandate his provider to make sure all work is delivered by US-based employees,” said Ryan.

When asked whether the 'buy American' plan will adversely affect the outsourcing industry, especially offshore outsourcing, Ryan opined that structurally the sector is unlikely to be hurt.

“There will be marginal concern around the short term in regard to determining where Obama wants to go with his policies on outsourcing and offshoring, but once that is clear, the market's providers will respond accordingly,” he said.

Peter Ryan pointed out that Obama's recent stimulus package has already generated controversy among American business leaders due to the provisions that will require all steel used in infrastructure projects paid for by this bill to be produced domestically.

“While these stipulations have no direct impact on the outsourced contact center sector, companies that provide these services to US customers from offshore locations may wonder if they have cause for concern,” he said.

However, according to him these firms are worrying unnecessarily.

Though during the 2008 primary election cycle there was heavy anti-outsourcing/offshoring rhetoric on the part of Barack Obama, since the November vote, however, these statements have been toned down drastically, Ryan pointed out.

And what do you think? Will Obama's 'buy American' plan spell doom for India Inc?