OTLP GRPC exporters don't respect domain NO_PROXY settings due to grpc bug

[akats7]

Description

Brought up this issue in the collector repo, realized it should likely be applied here as well.

There's a bug in grpc-go (here and here) related to the way NewClient does hostname resolution where now the host is resolved before the ProxyFromEnvironment function is called, due to this domain based no_proxy settings are not applied as the comparison is done only against the ip. localhost is not affected.

The grpc team is working on a fix but it seems like until that's in place we might want to revert to DialContext instead of NewClient.

Environment

• Go Version: 1.23.2
• opentelemetry-go version: 1.32.0
• grpc version: 1.67.1

Steps To Reproduce

Set HTTP/S_PROXY
Init OTLP GRPC client with target endpoint
Include endpoint sub-domain in NO_PROXY

Expected behavior

HTTP/S_PROXY setting should still be applied

[wasim-nihal]

Hello @MrAlias! I would like to contribute the fix for this issue.

[MrAlias]

Short term workaround: grpc/grpc-go#7556 (comment)

We plan to hold off on this until the next release of grpc: https://github.com/grpc/grpc-go/milestone/67

If it is not resolved in that release we will re-evaluate applying a more permanent fix here.

[wasim-nihal]

sure @MrAlias