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AHMEDABAD, Dec 22, 2011 -- Gujarat, which had been riding high on the BPO boom, is now concerned about a new proposed US law, which seeks to bar US call centres operating in locations such as India from seeking federal grants or loans.

The bill, if passed, also has a provision to charge US call centres 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.

Industry estimates say that eight out of 10 companies in Gujarat caters to the US markets.

"It is unfortunate that a report relating to the bill cites reasons like outsourced call centres like the ones based in India pose a serious security threat. This is nothing but a political move," said Jay Ruparel, co-founder and chief executive officer, Azure Knowledge Corporation.

The bill also proposes that customer service representatives will have to disclose their locations and transfer call back to the US on request.

Technomine UK, which gets 80% of its total business from the US, expects revenues to be hit by 25% if this bill is passed.

Shree Nair, managing director, Technomine UK, said, "There is already a mental block towards people coming from India and other Asian countries, which will be accentuated by the proposal to reveal location details."

Nair added that 50% of their customers in the US disconnect the call once they learn that the call is from outside the US.

Industry body Nasscom has said that the bill, if passed, will see objection from India. A statement issued by Nasscom on the issue indicates the mindset of a certain set of policymakers and could set the tone for the next year election.

Sunil Kakkad, president, Gujarat Electronics and Software Industries Association, said, "The bill is an effort to protect the local industry in the US. The bill will affect Gujarat, but the impact is not likely to be very high as 90% US companies doing business with Gujarat is not dependent on grants."

Kaushal Mehta, chief executive officer, Motif, said, "In terms of security breach, the US companies should carefully choose their outsourcing partners." Motif, which has operations in the US and Europe, gets over 70% of its business from the US.

After 2008, the dependence of most outsourcing by IT and BPO providers on the US has reduced with a lot of them getting into newer markets like Asia. "The move could have an impact on Gujarat, but not substantial as the economy of the US is slowing down," Ruparel explained.

Posted by Veronica Silva Cusi, news correspondent
Source: http://timesofindia.indiatimes.com

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