US immigration bill could slow indian outsourcers

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http://hosted.ap.org/dynamic/stories/A/AS_INDIA_US_OUTSOURCING?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-04-23-06-08-27

MUMBAI, India (AP) -- Low cost efficiency put India's outsourcing companies at the heart of global business and created a multibillion dollar industry that for years has skated over criticism it was eliminating white collar jobs in rich nations. Now, the industry's long-held fears of a backlash are being realized in its crucial U.S. market.

Provisions in an overhaul of U.S. immigration law will close loopholes that allow outsourcing companies, Indian and American, to pay guest workers in the U.S. at rates often below wages for equivalently skilled Americans. The proposed changes are in line with President Barack Obama's vows to make it tougher for U.S. companies to replace American workers with cheaper labor abroad, either by opening factories overseas or subcontracting their work to outsourcing companies.

The cost to the Indian companies, which do everything from running call centers to managing the massive amounts of transactional data generated by banks, could run to several hundred million dollars in lost profits.

India's $108 billion outsourcing industry has shrugged off bad publicity in the U.S. and other countries since it began blossoming more than a decade ago. It has plenty of supporters among global corporations who prized outsourcing's ability to lower their costs and boost profits. But with the world economy stagnating, and U.S. unemployment at stubbornly high levels since the recession, a day of reckoning appears to be looming.