India's software and IT services companies will not use Britain's proposed relaxation of immigration restrictions to send more IT contractors to the UK, India's leading IT trade body said last week.
Atul Nishar, chairman of the National Association of Software and Service Companies, which represents around 600 software and services companies, said that Indian suppliers are more interested in high-value offshore development than providing British firms with short-term contractors.
The warning comes amid renewed claims that the Government's IR35 tax reforms will work against plans by the Overseas Labour Service (OLS) to speed up visa applications for overseas IT workers by encouraging British contractors to seek work overseas.
"Nobody should believe Indian companies are out to ship people to the UK. That's not our priority at all," said Nishar.
It makes financial sense for Indian suppliers to use their skills to develop software for British companies from India, using satellite and e-mail links to stay in touch with their clients, said Nishar.
India is keen to increase its software exports to the UK and Europe, which accoun-ted for around 22% of $3.8bn overseas IT contracts last year, well behind the US which accounts for 60%, he said.
Large UK companies, such as Sainsbury's have turned to Indian companies to outsource development work after successfully outsourcing their Y2K work to India.
Nishar said that plans by the OLS to make it easier for Indian IT teams to work alongside UK clients without having to wait months for visas will encourage more offshore development.
This would ease the fears of some British firms that they will lose control over projects unless they have the contractor on-site, he said.
Nishar urged the UK government to crack down on a few unscrupulous firms that are illegally sending over staff to the UK, often on subsistence wages, to act as freelance contractors.
Computer Weekly has uncovered incidents of overseas software companies illegally sending contractors to the UK on training visas, or on wages which fall below the legal minimum.
"Its not only Indian companies that do such a thing. The Government should come down strongly against any company that is doing something wrong," said Nishar.
He urged the UK to adopt the US approach of vetting companies before agreeing to fast track their staff with entry visas.