Ban On BPO: Govt Readies Taskforce

New Delhi, Aug 7: : | Updated: Aug 8 2003, 05:30am hrs
The government is readying itself to meet the situation arising from the proposed move by four American states New Jersey, Connecticut, Maryland and Washington to enact legislation to ban business process outsourcing (BPO) of governmental contracts to developing countries.

A taskforce to be chaired by the information technology department and consisting of representatives from the ministries of finance, external affairs, and commerce & industry is being set up to draw up an appropriate strategy, thereby protecting the countrys interests.

According to the latest information reaching the commerce ministry, though these American states had introduced bills a few months ago to ban outsourcing of governmental contracts, they have not yet been passed so far.

Ministry officials say the government is closely watching the situation, and point out that the issue has been raised at several fora in the past few months. More recently, commerce and industry minister Arun Jaitley during his talks with US trade representative Robert Zoellick in Washington in June, had expressed New Delhis concern over the subject, they add.

On his return from Washington, Mr Jaitley had said local politicians, trade unions and others in these states were exerting pressure on them to enact legislation to ban outsourcing.

He had said the impression he had gained during the visit was that the American government was strongly against the states framing legislation terming them as a bad policy.

The minister had also said he had voiced public concern in India that at a time when market access negotiations were on in Geneva, proposals for enacting legislation to ban outsourcing were sending wrong signals to the Third World.

Again on an earlier occasion, Mr Jaitley had said while the buzzword at the trade talks was market access, in reality, it was market denial that the developing countries had to face as reflected in the moves by the four American states to ban BPO.

Then, he had also referred to Washington reports that dozens of household names spanning insurance, banking, technology and telecom were transferring a part of their while collar administrative and customer services work to Asia, particularly India to cut costs.

Although the moves, according to the reports, were limited to government contracts, it would be a wrong signal in the context of multilateral trade talks which were primarily aimed at improving market access.