Press Information Bureau

Government of India

Ministry of Commerce & Industry

03-September-2012 16:43 IST

Ban on Outsourcing

On 6th August, 2010, the then Ohio Governor, Ted Strickland issued an Executive Order prohibiting the spending of public funds for services provided from offshore locations such as India. This order was replaced by new Governor John Kasich with another Executive Order in June 2011. Some of the key provisions of the Executive Order of June 2011 are similar to the Executive Order of August 2010. Its main provision reads as under:

“No State Cabinet Agency, Board or Commission (“Executive Agency”) shall enter into any contract which uses any public funds within its control to purchase services which will be provided outside the United States. This Executive Order applies to all purchases of services made directly by an Executive Agency and services provided by subcontractors of those providing services purchased by an Executive Agency.”

India has consistently raised the issue of impact of US protectionist tendencies on Indian industry, especially Indian IT companies, at high level bilateral meetings between the Indian and the US leadership.

This information was given by Minister of State for Commerce and Industry, Shri Jyotiraditya M. Scindia in a written reply to a question raised in the Lok Sabha today.

DS/GK

Ban on outsourcing restricts use of public funds for services provided outside the United States, including subcontracted services. Ban on outsourcing restricts state executive agencies from using public funds to procure services delivered from locations outside the United States and extends the prohibition to services supplied by subcontractors of contracted providers.