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US legislators demand end to offshore outsourcing

February 11, 2003 11:50 IST

As unemployment rises and US economy fails to show signs of early revival, offshore outsourcing by American corporations, including from India, is coming under close scrutiny with legislators, trade unions and workers demanding an end to it.

With election due next year and process of picking candidates by parties due to begin later this year, some of the state legislators are advocating protectionist legislations which, they believe, would bring jobs back to their constituencies and would be popular among the constituents.

New Jersey first mooted the legislation that would affect the call centres of US firms in other countries, including India.

The Bill, which is yet to be approved, would not ban outsourcing as such but would force government contractors to pay American wages to wherever the call centres be. That, in effect, would take away incentive for outsourcing.

The minimum wage in the United States at present is slightly less than six dollars per hour. But outsourcing costs much less as they pay local wages.

Now several other states including Connecticut, Missouri, Maryland and Wisconsin are thinking in terms of legislations to restrict outsourcing.

The Indian sources in New York do not consider this as a major threat at present and say even if government contractors are barred, corporations would continue to outsource their business to remain competitive.

Executive director of Indian American Forum for Political Education Narayan D Keshvan said, “Indian corporates, in my view, have been sanguine and not pro-active in countering this growing phenomenon of legislative protectionism to serve populist sentiments although they make no economic sense," Keshavan said.

Lobbying and grassroots advocacy is the answer to the growing anti-outsourcing sentiments, he added.

"This is a bread and butter issue for American politicians and their constituencies and just as India has the knee-jerk Swadeshi-Manch forces, the US too has its own knee-jerk protectionist forces who care two hoots for globalisation and general good," Keshavan said.

Dharam Shourie in New York
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