"Excuse me," I interrupted. "Where are you?"

"Oh, we're American Express' Call Centre in Bangalore, India."

"Oh really? How interesting."

That was it, we went back to the task at hand and she efficiently finished the job in a few minutes. As I hung up, I thought to myself, "Good for India!"

Going through daily life, I started noticing this more often. When I called AOL to try to cancel my account for the fifth time, the helpful lady giving instructions was in India. Palm Pilot's "Level 1" help desk seemed to be in America, but when they were stymied and bumped me to "Level 2", an unmistakably Indian voice came on. Recently, I even started getting sales calls from India for credit cards.

A few months back, a new pattern began to emerge. Suddenly, the customer service reps weren't eager to divulge where they were from. "Oh, we're not allowed to disclose location," said one nervous voice. Very cloak and dagger. Maybe it's some new security measure, I thought to myself. Then the New York Times article came out -- "We're from Bangalore (but we're not allowed to tell you)." Indian call centres now had to acquire American accents and generic Anglo names. There was a new nervousness in the face of an incipient backlash. Suddenly, Dell was closing its Indian call centre in the face of protests, New Jersey was trying to pass a bill blocking outsourcing to India, and an angry Indiana politician huffed, "I represent Indiana, not India!"

But can the genie be put back inside the lamp?

Outsourcing, BPO (Business Process Outsourcing) and "Offshoring" are new terms in our vernacular. India is at the red-hot centre of this skill-based revolution. Thirty per cent of all new Information Technology (IT) work for U.S. companies is now done abroad, mostly in India. McKinsey Consulting calculated that the top three recipients of US outsourcing in 2002 were Ireland ($8.3B), India ($7.7B) and Canada ($3.7B). Analysts forecast that, by 2008, Indian IT services and back-office support will grow to a $57 B annual industry with four million workers.

Major US companies now have branches in India -- either doing IT work, or back-office support. The companies include Morgan Stanley, Citigroup, Intel, IBM, Cisco, Motorola, Hewlett Packard, Oracle, Yahoo, Ernst & Young, Accenture, HSBC, and of course, the trailblazer in hiring Indians, Microsoft. Some of these multinationals have had diversified operations in India for almost a decade. But a relatively new phenomenon are Indian companies whose entire business is outsourced work from the US. Recent success stories include MphasiS, which processed tax returns of 20,000 Americans this year (analysts predict that 200,000 US tax returns will be processed in India next year). Then there is OfficeTiger, which employs 1,200 people to do research and analysis for eight Wall Street firms. Finally, there are GE Capital's four Indian centers, which design statistical models, prepare data for GE annual reports, write software, and process $35 billion of global invoices

Indian outsourcing business has always dominated in IT, accounting and financial services. Ambitious Indian firms have now expanded to food-stamp paperwork, auto engineering, drug research, airline industry and work for the U.S. Postal Service. India has two key strengths-- a gigantic technology and science infrastructure which churns out hundreds of thousands of graduates each year, and the use of English at all stages of education as a unifying language. Armed with this combination, India's potential is huge. China dominates in manufacturing, which is only 14 per cent of the US economy. By contrast, the service industry, where India has laid its stake, makes up 60 per cent of the U.S. economy.

This runaway growth comes with a price. Just as the success of H-1B visa workers during the Internet boom led to an anti-immigrant backlash, the outsourcing revolution faces its own pushback. The key argument here is that every time a project is outsourced, those jobs are lost in the US. Estimates vary widely, and it is impossible to calculate how much of these job losses are also due to the overall recession. Job loss estimates range from 600,000 jobs by 2005 (Forester Research) to two million jobs by 2008 (Deloitte).

As anger builds over claims of lost jobs, American unions have emerged as aggressive opponents of outsourcing, often with a thin patina of xenophobia in their rhetoric.

TechsUnite.org (CA), Alliance of Technology Workers (WA) and Rescue American Jobs have all been pushing politicians to pass "Buy American" legislation to limit federal agencies from sending jobs overseas. In New Jersey and Indiana, bills to outlaw shifting state jobs overseas were narrowly defeated. Maryland, Michigan and North Carolina are planning similar legal battles in the future. Incessant complaints about "bad service" and "strange accents" forced Dell Computers to shut down one of its call centres in India, a major victory for the "America First" lobby.

Not everyone accepts the unions' arguments. In England, the Guardian applauded the irony of the new power structure: "Britain's empire is striking back. Former colonies have found a silver lining in the bitter legacy of conquest: English, the language of former masters, is a competitive advantage in the global economy." After Norwich Union sent one of their centers overseas, a spirited debate erupted on the BBC website. From London, Theresa Law wrote, "Give me an intelligent, well-educated, polite Indian on the end of a telephone handling my customer queries, over an ignorant, rude, unhelpful and unwilling British call handler any day!" Henry, in response to numerous e-mails about "stolen jobs" wrote, "What a breathtaking display of economic illiteracy and downright racism. Why shouldn't people in India have a crack at earning a decent living if they can do it more effectively than can be done in the UK?

Outsourcing is an incredibly complex economic and ethical issue, with winners and losers on both sides. Yes, why shouldn't Indians (and by extension, Bangladeshis) have a chance to improve their living standards? On the other hand, as thousands of jobs are lost in the West during the present recession, much of the blame will fall on outsourcing. But free trade means the flow goes both ways. If the West demands open access to global markets for its exports, doesn't the Third World have the right to demand free access to labour markets? Finally, the unions need to make the connection between outlandish CEO salaries, accounting scandals, and lost jobs. Outsourcing is not the only reason for all worker woes.

The last word on this goes to Simon, another contributor to the BBC website, who wrote, "What we are seeing is capitalism working in a totally uneven playing field and it will carry on until the playing field is evened out. That is going to be a long and painful process and the world simply isn't going to be able to support it's entire population at the standard of living we would like to continue to enjoy."

Naeem Mohaiemen is Editor of Shobak.org.

Additional Research: Udayan Chattopadhyay