The United States Agency for International Affairs or USAID, in a controversial move, has decided to fund the development of Sri Lanka’s, as well as Armenia’s offshore outsourcing industry.

TCS (NSE:TCS) CEO N. Chandrasekaran sounded optimistic when he said during an interview that TCS had not seen an impact from the Europe debt crisis among its clients. Particularly since the company’s multi-million dollar UK outsourcing contract with PADA appears to have been in jeopardy for quite some time.

Expectations were high for the end of quarter results of India’s number two outsourcer, Infosys (NASDAQ:INFY). As the first of its peers to release quarterly results, the outsourcing company is responsible for setting the tone for India’s outsourcing sector. It was therefore a big disappointment when Infosys announced a 2.6% drop in profit for the period of April to June 2010.

Contrary to the slowdown projected for IT outsourcing growth, in just a span of a few days, three big outsourcing companies won IT outsourcing contracts all from different regions in the world.

IT outsourcing growth is on the rebound but it is unlikely that it will ever be the same again. After the big boom that the industry experienced a few years ago before the recession, analysts estimate that this is unlikely to happen again.

Following the UK elections and subsequently, the naming of the country’s new Prime Minister David Cameron and Chancellor George Osborne has pushed government outsourcing contracts in limbo, as companies anticipate the stance the new government will enforce.

The big three of Indian outsourcing companies have a lot to evaluate, as their lower ranking rival Cognizant (NASDAQ:CTSH), is slowly starting to emerge ahead of the pack following the company’s first quarter results. This comes with the continued albeit slow rebound of the outsourcing market this year.