Indian outsourcing unscathed by US outcry

BANGALORE: Even as reports erupt about US states voicing against outsourcing, the industry is shrugging off the protest as a minor aberration and is focussing on business as usual. It is learnt that Nasscom and CII may come into the picture to do the rescue act. They are planning to hold talks with their US counterparts and try solving this issue.

As per industry resources, Nasscom is doing its bit by making contact with legislators and constitution makes and making them understand the core issue. It has also appointed a public affairs and PR firm, Hill & Knowlton for a Global Awareness Program both in the US and Europe. It is associating itself with an apex industry body, ITAA for addressing the people that outsourcing does not mean exporting jobs.

vMoksha’s Chairman and a CII member, Pawan Kumar suggested that a campaign should be held to create awareness among the people concerned about the outsourcing issue. "A US-India business forum would be an ideal platform to address the issue. Awareness can be created to the concerned people assuring that there is no loss of jobs, as they think, if they outsource their work to India," he added.

"These things cannot be taken seriously, they are expected to be raised on and off. This is something like the outsourcing of manufacturing to the Asian countries and will die down in the long run," said Avinash Vashistha, managing director, of neoIT in India. The company is a leading outsourcing agent.

The industry in general feels that the US is too huge a market not to outsource the work outside and India is the first choice for various reasons. "Three to four percent of the US population is working in the BPO sector," announced TS Hariharan, VP-Quality 24/7 Customer-a leading call center in India with a healthy line up of European clients and US. The US government contribution to the total outsourcing of the country is roughly one percent, according to Hariharan.

Sumanth Cidambi who heads the finance and administration in Infosys BPO arm, Progeon, agrees with Hariharan, saying, "The government sector outsource a very small percentage of work to India. This will not affect the business to India in any way."

Further more the legislation would have very little impact on private companies in the US, even if the proposed bill were passed. Economics for the private companies plays against not outsourcing the job. The cost advantage that India offers is immense, "almost one third," the industry had reckoned. The cost advantage played a major role during the tough times of the recent downturn. Competitiveness and reducing the workload also plays a crucial role for companies to outsource.

"From a business perspective, there is a need for large corporations to reduce costs and be more competitive in their businesses. Outsourcing, particularly to India, provides them a huge opportunity to do this and over a longer period of time, these short term irritants will not have any impact on the outsourcing business to India," commented N Krishnakumar, Vice Chairman and President-Europe of MindTree.

"From a practical point of view, this (New Jersey) bill may not have too much of immediate impact since it has to be passed by the State Assembly and signed by the Governor before it becomes a law," encourages Krishnakumar. "The key reasons behind all these Bills appear to be more politically motivated since in the current context, there are issues in the U.S. economy and these are being propagated by interested lobbies which want to divert the attention from key issues in the U.S economy," he adds.

However some feel that this would impact the growth rate by slowing it. "These noises will slower the growth rate. For a year or so, there will be a kind of wait and watch policy, but outsourcing will continue," affirmed Vashistha.