Outsourcing Ban Caught Indian Mission Napping

New Delhi, Jan 27: | Updated: Jan 28 2004, 05:30am hrs
While Indian software and business process outsourcing (BPO) industry is putting up a brave face, the US president is all set to sign on the dotted line. Indian officials privately admit that the bill to ban offshoring government jobs outside the US is all but a fait accompli. But there are red faces in the corridors of South Block. The Indian mission in Washington was unaware about what lay tucked inside the omnibus legislation. Nasscom wasnt far behind. Despite its ongoing lobbying efforts, neither the mission nor Nasscom got the real message until 24 hours of the US Senate clearing the bill.

Top guns in the ministry of external affairs (MEA) are fuzzy about what New Delhi can do next. We shall continue to impress upon world governments that outsourcing doesnt hurt as much as whats being made out. Yes, we need to request the US government on how we can undo the damage, says a senior Foreign Office functionary. He doesnt spell out just how this is possible. Or when. South Block is putting its hopes on more Indian companies forging joint ventures overseas, buying out IT firms overseas to the extent of 100 per cent of their net worth, and listing themselves in overseas stock exchanges.

On whether the Indian mission or Indian industry have any inkling, the official answers by way of counter-question. They should have known. They must have known. If they did not know, how could they be in the business

So, was the Senates decision on Thursday night (US time) a surprise It was from the simple fact that the process went through an elaborate legislative process and New Delhi did not raise its apprehensions with Washington through diplomatic channels.

When contacted by FE, Nasscom kept mum on how much it knew beforehand. One informed source assured that the matter was known to a few Indian software/BPO business leaders as well as the mission in Washington. He claimed things were kept under wraps considering its low impact on the Indian outsourcing business.

The noise about it could have harmed India much more, the source argued.

Nasscom vice president Sunil Mehta declined to comment. He limited his remarks to Nasscoms stand over the weekend that the bill would not have any significant impact on the Indian software and BPO sector.

Mr Mehta said the bill does not cover government contracts in general and refers to an updated guidelines (a publication called OMB Circular A-76) last summer to be used by government agencies when deciding whether work performed by government employees could be provided more cheaply by private companies. The goal of the guidelines was to eventually shift 425,000 federal government jobs (out of 1.8 million total) to private firms under government contract.

Moreover, the bill was originally going to apply to the entire government, but as finally passed, it was scaled back significantly to only apply to agencies covered by only few areas including transportation, treasury, and independent agencies, Mr Mehta said, adding that the bill would be valid till September 2004 only.

The US senate has approved an omnibus Spending Bill piloted by Republican Senator George Voinovich. Tucked in it is a provision which bans the offshoring by US government departments.