Having lost a $15 million contract in Indiana state, Tata Consultancy Services has said the increasing backlash against outsourcing in the United States was becoming a matter of concern.

"It (the government IT contract) is big market for Indian companies. If this sort of things happen, obviously it is going to restrict our choice to compete in that market. The initial impact is not there. But looking at the long term view of the market, it is something we need to worry about and engage with governments to ensure that we can do something, Phiroz Vandrevala, executive vice president, TCS, said in New Delhi.

As far as TCS was concerned, he said, cancellation of a $15 million contract over three years, could be made up by the company.

"We bid on a contract and we won that. If someone wants to cancel it, we will see what recourse we need to take. This is a government related issue. We expect our government and industry association like Nasscom to respond to it. A single company is not going to take that up," he said.

The contract had been cancelled not because TCS did not perform but because of a statutory change, he added.

"Both TCS and Indian IT's share of government contract today is very small. So the immediate impact of this business is not going to be big. But the concern is that it is a big potential market in the future," Vandrevala said.

Echoing Vandrevala's views, NIIT chairman R S Pawar said, "We are not worried, but we should not be complacent."

He said this could be seen as a structural issue, and when work starts moving from one country to another, the impact would be felt by both the countries.

"If it happens at a time when the economy is doing well, it is not so significant and the issue is not understood. If it happens at a time when economy is challenged then it becomes an issue," he said.

Pawar said he believed structural changes were inevitable.

"We should educate people on the good things which are happening. Our role is not to get provoked at the moment but focus on managing the transition. And the work will come to you," he said.

Pawar said most Indian companies had not been impacted so far, but the industry needed to spend a lot of time educating the government and customers about the issue of outsourcing.