NEW DELHI: Reacting to the US Call Centre and Consumer Protection Bill which seeks to bar US call centres operating in locations such as India from seeking federal grants or loans for five years, Nasscom has said that in case this bill is passed, it will see objection from India.

Nasscom President, Som Mittal said that the bill will have a negative impact on India. Nasscom is also of the opinion that an objection to the passage of the bill will be raised not only by India but also by Latin America, Ireland, Philippines and Canada.

“The concern is not only about what the content of this bill is, but that US will come out with many more protectionist things,” he said in an interview to Times Now. If any bill like this is passed it will have a far more negative impact on the US because such trade barriers may lead to other countries imposing similar conditions, he opines.

“These are individual sponsored bills. They come up. Many of these congressmen do it because of their own beliefs and so on but the US Congress in our opinion would not pass this,” he concluded.

Mohandas Pai, who quit Infosys this year to join Manipal Education & Medical Group is of the opinion that the bill is being tabled by US to save jobs. Unemployment in US is high. Whether the bill will be passed by the Senate or not, Pai opines that the US will take more steps to protect jobs in the country.

He feels that with India having lost the first position in the call centre industry to Philippines, the exposure is low. “The impact will be much more on the Philippines than in India and if it has to impact India over the next one year or 1.5 years, there is enough time for the BPO industry to make up the lost revenues,” he told Times Now.

The new Bill by Rep Tun Bishop and Rep David McKinley tabled in the House of Representatives will also penalize US call centres with a penalty of $10,000 per day, for failing to report relocation to an offshore location, within 60 days to the US Department of Labor. According to this bill, call center operators who answer calls will need to identify their location and the caller will have a choice of choosing a US based operator.

A statement issued by Nasscom on the issue reads: “We have seen attempts to present such bills in the past. However, the bill has only been introduced in the house, and there is a long way for this to become legislation. The possibility for the bill to become a law is very low. But it indicates the mindset of a certain set of policymakers and could set the tone for the next year, especially it being an election year.

It is indeed disappointing to see US adopting ‘protectionist’ measures like these that restrict free trade and establish discriminatory trade practices. US lawmakers seem to have developed the practice of unfairly taxing companies working overseas, to pay for domestic issues.”

S Mahalingam, CFO, TCS said that it is going to take sometime to react but in general there is a lot of value that is provided by the call centres and India provides a phenomenal advantage.

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.