The Indian outsourcing industry is criticizing the state of Ohio and its governor, Ted Strickland, for reaffirming a state law barring any taxpayer dollars to be used to pay for the outsourcing of services.

The Indian National Association of Software and Service Companies, which represents many of the nation’s outsourcing companies, called the policy discriminatory, and chalked the move up to election year pandering.

“We are taking up the issue with the US officials concerned later this month. We will also seek the support of the union minister for Industry and Commerce Anand Sharma, who will be in the US at the same time,” the group said in its’ statement.

The reaffirmation of Ohio law came last month after an embarrassing snafu involving a central American call center was reported. The controversy arose in July after it was revealed that call center services for a federally funded appliance-rebate program had been outsourced to a location in El Salvador.

The program, funded by the $787 billion stimulus package, provides tax rebates to consumers for the purchase of energy efficient appliances.

In March, the state contracted with Texas-based service provider Perago Inc. for a hefty sum of $357,300. The company then outsourced the call center work to a company in El Salvador.

According to Strickland, Ohio law prohibits public funds from being spent on services provided offshore. State directive already requires agencies to ask vendors where all services will be performed.

“Outsourcing jobs does not reflect Ohio values,” Governor Ted Strickland said in a press release. “Ohioans have been among the hardest hit by more than a decade of unfair trade agreements and the trickle-down economic policies that promoted offshoring jobs at the expense of Ohioans who work for a living.”

The problem with the $11 million program was discovered not by a state official, but by a private citizen who asked the Texas-based company about the location of the call center.

The executive order issued by Strickland reaffirms state law and requires the Department of Administrative Services to develop new procedures to ensure that no taxpayer dollars are used for services outside the U.S.

“We must do everything within our power to prevent outsourcing jobs because it undermines our economic development objectives, slows our recovery and deprives Ohioans and other Americans of employment opportunities,” Strickland said.

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