News Hour- US Bill may impact Indian BPO industry; may hit call centres like Convergys, EXLService

NEW DELHI: A new US Bill tabled in the House of Representatives seeks to bar US call centres operating in locations such as India from seeking federal grants or loans for five years. The bill, if passed, will also penalise US call centres with a penalty of $10,000 per day, for failing to report a relocation to an offshore location, within 60 days to the US Department of Labor.
The new law may impact the growth of the already sluggish $14-billion Indian BPO market, which is under pressure, due to a slowdown in US markets and competition from other locations. 
"It's clearly a protectionist bill. Though, none of the Indian call centres apply for a US federal loan or grant, it will impact everybody if it is passed. The likelihood of bill to pass is very low," said Ameet Nivsarkar, Vice President, Global Trade and Development at Nasscom.

Large US centres such as Convergys, Teleperformace and Sitel, which have presence in India, may be impacted with the decision. Even captive units of companies such as UnitedHealthcare Group, which operate in India, along with US headquartered call centres such as EXLService, would be impacted with this decision. 
The bill, United States Call Center Worker and Consumer Protection Act, is tabled by four lawmakers - one Republican and three Democrats, indicating a bipartisan support to the bill. The law is also endorsed by the Communication Workers of America, which has 5.5 lakh members, including some from the broadcast and media industry. US representative Timothy Bishop, who introduced the bill earlier this month, terms outsourcing as "one of the scourges of US economy". 
"Outsourcing is one of the reasons we are struggling to knock down the unemployment rate," Bishop said in the House. Bishop added that there are 47 lakh call centre employees in US today, down from 53 lakh in 2006.
The bill mandates that before relocating a call centre to a location outside of the United States, an employer shall have to notify the US Secretary of Labor, failing which a civil penalty of $10,000 will be levied for each day of violation on the call centre. Such employers would be barred from seeking indirect or direct Federal grants or Federal loans for five years, the bill mandates.
(Source- http://economictimes.indiatimes.com)