India to maintain resistance to US outsourcing ban

Jaitley, however, said US trade representative Robert Zoellick had categorically told him that even though states were doing this, the federal government thought it was a ‘‘bad policy’’ and was opposed to such legislations and was trying to resist them.

Five US states, including New Jersey have proposed such legislations. Though, due to pressure from India and US, domestic industry struck out an important clause which makes it mandatory for a call centre to divert all the data to a local call centre making the operations very costly and unviable, the other two clauses still remain within the proposal stipulating government procurement to be outsourced within US and identification of call centres.

Through outsourcing US industry had saved about $12 billion last year taking advantage of cheaper services in countries like India.

Jaitley said the two countries had moved forward on the long-pending issue of having a totalisation agreement with the US which would help Indian professionals, contributing to social security network, avail refund of the amount paid.

Under the US laws, the expatriates have to contribute 15 per cent of their salary towards social security but would be eligible for benefits only after 10 years of stay. However, most of the Indian professionals going abroad stay there for a maximum period of six years and hence do not get any social security. At the same time they fail to get any refund due to lack of totalisation agreement.