Major Indian IT companies and industry bodies are growing concerned about a proposed rule by the US Federal Communications Commission (FCC) that would restrict the use of offshore call centers by some US companies – a move that could reshape one of the most important sources of corporate outsourcing revenue that has made India the global back office for US consumer companies.
The FCC proposed the rule on March 26, and issued it the next day, with a public comment period open after its publication in the Federal Register. Comments are due by May 26, with comments to be responded to by June 22.
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The rule, developed by the FCC as a consumer protection and national security measure, introduces three broad interventions: capping the share of customer service calls that U.S. service providers may route to foreign call centers; Requiring workers in those centers to demonstrate proficiency in spoken and written American Standard English; Requiring service providers to inform customers at the beginning of each call whether they are being handled outside the United States — and to offer to transfer them to a U.S.-based representative upon request. The FCC floated 30% as one standard for maximum call volume, but left the number open for comment; The text of the proposed rule carries a placeholder instead of a fixed percentage.
The agency also proposed that calls involving sensitive information — passwords, Social Security numbers, bank account or credit card details — be handled exclusively by U.S.-based representatives, regardless of any cap applied to general call volume.
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Industry bodies and major IT companies are now preparing to challenge the proposals through a public comments process, according to people familiar with the matter who spoke to HT. NASSCOM, the main lobbying body for the Indian technology industry, confirmed that it will provide comments and seek direct engagement with the FCC and relevant stakeholders.
Shivendra Singh, Vice President and Head of Global Trade Development, NASSCOM, said: “We are looking for a positive contribution through engagement to allay concerns. We have all been given an opportunity to contribute through submission, which is the first phase, and we will do so. After that, we will work with relevant players to highlight areas where we can contribute and allay concerns.”
NASSCOM’s core argument will challenge the FCC’s framing of offshore call centers as a security risk. Singh said the distinction the agency should draw is between trusted service providers and bad actors — not between ground and offshore operations. “Offshore operations should not be equated with high risk. The distinction should be between trusted service providers and bad actors. Too broad restrictions risk unintended consequences, including higher prices and lower quality of service. The focus should be more on anti-fraud measures, and this is something we are very keen to work on and support,” he said.
Nasscom and Indian IT companies will propose concrete alternatives, including creating a trusted third-party provider registry and improved call authentication frameworks, Singh added.
Western companies have benefited for years from access to skilled, English-speaking labor at a fraction of the domestic cost—a wage gap that Federal Communications Commission data puts at more than twenty times greater than between India and the United States—while companies and workers in countries like India have built one of the most resilient engines of middle-class employment the service economy has ever produced.
The FCC case relies on a combination of customer satisfaction data, privacy enforcement history, and fraud statistics. In a statement accompanying the proposals, the FCC cited figures indicating that nearly 70% of U.S. companies have outsourced at least one department, arguing that the shift has cost American communities jobs while creating a host of downstream problems for consumers. The agency cited FBI figures showing Americans lost at least $1.3 billion to call center fraud in 2023, and said legitimate offshore call centers served as a training ground for fraudsters who later used the acquired skills and infrastructure to target American consumers. The FCC also cited enforcement actions against providers whose foreign call center employees accessed customer data to unlock stolen cell phones and sell that information — citing this as evidence that contractual safeguards alone are insufficient.
The proposed rules currently apply to providers of telecommunications, mobile telecommunications, interconnected VoIP, cable television, and live satellite services. The FCC has separately requested comment on whether the scope should be expanded to include other sectors.
The FCC’s proposals arrive at a time when Indian IT companies are already navigating a more hostile US political environment. The $100,000 H-1B visa application fee and changes to the H-1B lottery that favors higher earners, introduced last year, have complicated workforce planning for IT services companies. The Employment Act, introduced in the US Senate in September 2025, poses another challenge, as it proposes to impose a 25% excise tax on payments for services that US companies provide to foreign entities. The bill was read twice and referred to the Senate Finance Committee.
