In an article which first appeared in the Financial Times, Britain’s new points-based immigration system risks making it harder for India and other developing countries to export information technology systems to the UK, New Delhi has warned.
Kamal Nath, Indian trade minister, told the Financial Times that the new regime could make it harder for software and other IT executives to travel back and forth between India and the UK, imperilling their ability to fulfil service contracts.
“We are not asking for more permanent immigration,” Mr Nath said.
“We are talking about people coming in for a month or so to integrate software systems.”
An Indian software company that could not send executives or technical experts into the UK for short periods would be unable to service warranties or sell new systems that would require on-the-spot maintenance in the future, he said.
Mr Nath said that New Delhi was still studying the new system, but that it risked becoming a “retrograde step”. Under the old immigration regime, there was special provision for the temporary movement of workers to fulfil commitments under international trade deals. Such liberalisation is one of India’s key demands in international trade talks, such as the bilateral deal it is negotiating with the European Union.
Liam Byrne, the UK immigration minister, said: “Our points system is a big change and we are determined to get it right. I am listening intensively to communities all over the country to help understand where in our economy we need skills from abroad.”
The UK Home Office will create a special immigration category for temporary workers, details of which it said it would release shortly.
India’s software and business processing exports are valued at about $40bn (€26bn, £20bn) a year. Total UK imports of computer and information services were worth £2.7bn in 2006.
Mr Nath said the new restrictions did not square with the UK’s claims to be in favour of promoting free trade in services.
“In the liberalisation of services, the temporary movement of people is an important thing.”
Data obtained by the Association of Technology Staffing Companies, which represents British IT professionals, showed that 38,450 work permits for IT jobs were issued to non-EU residents in the UK last year – more than double the total five years ago – of which 82 per cent went to Indians. Most of these were intra-company transfers of permanent employees recruited outside the EU, a phenomenon that Atsco refers to as “onshore offshoring”.
Ann Swain, Atsco’s chief executive, said the Home Office needed to ensure that foreign workers were not taking jobs that British workers could do. “Organisations have been offshoring UK IT jobs in order to cut costs, but now they are exploiting the leaky visa system to import cheap labour from abroad,” she said.
I have today had a meeting with a company directly affected by these rules. The Engineering company, which has offices in the UK and Bangalore in India, brings in workers from India to fulfil contracts in the UK.
The company has arranged Work Permits and in some cases Intra Company Transfers for their workers, but the staff tend to go back and forth every few months and are often not resident in the UK.
Arranging Work Permits is time consuming and expensive and not viable for short periods. The person responsible for all the legal documentation required told me that she would like to see a more flexible and responsive system which caters for employers bringing in staff for shorter periods.
Many such workers often come in on a business visa not realising that this does not entitle them to work.