A proposed rule by the US Federal Communications Commission (FCC) has triggered another serious concern for the Indian IT industry. The regulation is tantamount to a quantitative and non-tariff barrier on services exports by offshore call centres to the US — of which India has a large share — as it seeks to put a cap on operations which can be outsourced, in terms of both quality and quantity. The justifications provided are loss of jobs for Americans and customer
A proposed rule by the US Federal Communications Commission (FCC) has triggered another serious concern for the Indian IT industry. The regulation is tantamount to a quantitative and non-tariff barrier on services exports by offshore call centres to the US — of which India has a large share — as it seeks to put a cap on operations which can be outsourced, in terms of both quality and quantity. The justifications provided are loss of jobs for Americans and customer safety concerns.
On face value neither of them are without basis. American companies have outsourced jobs to save costs and of late, there has been an increase in cyber frauds to which America isn’t immune either. However, to put it as if the gains of such outsourcing have accrued to only service exporters is being economical with the truth. Outsourcing has generated massive profits for American corporations too. Similarly, cyber frauds need concerted collective action by all countries as is increasingly becoming obvious from their mutation into organised crime syndicates in South East Asia.
India’s IT industry lobby is preparing to counter the proposed law for obvious reasons. One can hope that good sense will prevail in the US government and knee jerk responses will not hurt an industry which is already feeling the AI squeeze. To be sure, there is good reason to counter the proposed law on one more front. If the US wants greater access for its merchandise trade across the world, India included, it cannot hope to do so by closing its own markets to the rest of the world. Indian trade negotiators, who are in the process of finalising the trade deal with the US, should remind the US of this basic bargaining principle.
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