The anti-outsourcing move in the United States is acquiring gigantic dimensions. A number of protectionist measures are under way like changes in the Request for Proposals (RFP) and the "Buy American Improvement" Act.

The changes in the RFP will allow states to give preferential treatment to local companies while bidding for government contracts.

So Indian companies will not be completely banned from bidding but will have to contest with "preferred" bidders.

The "Buy American Improvement" Act seeks to tighten the 1933 "Buy American" Act and strangle the offshoring of US jobs in the manufacturing and services sector.

What is more, over 60 anti-offshoring Bills have been passed by 20 US states, proving that the month-old US Senate Bill barring outsourcing of government contracts is not a one-off incident, according to the Information Technology Association of America. Most of these Bills were filed in the last 11 months.

It does not stop with state-level Bills. Both the US Central Intelligence Agency and the General Accounting Office are working on reports to study how offshoring poses a threat to the economic and national security of the US.

"The backlash is not purely political as most people presume and will not die away with the conclusion of the US presidential elections. This wave of protest against offshoring will subside only when the job scenario in US improves," Jeff Lande, vice president of ITAA, said at the National Association of Software and Service Companies 2004 conference here.

The bills passed at the state level have not had much of an impact on Indian BPO business because government contracts, both state and federal, account for less than one per cent of the total outsourcing done out of the country.

But if the US-government decides to flex its muscle and stop outsourcing in sectors like healthcare, energy, utilities, financial services and telecom, this can have a major impact on the Indian BPO industry, Lande said.

The heat is on

• Request for Proposals changes will allow states to give preferential treatment to local companies while bidding for government contracts.
• Indian firms will not be banned but will have to contest with 'preferred' bidders.
• Buy American Improvement Act seeks to tighten the 1933 Buy American Act and strangle offshoring of US jobs in manufacturing and services.