Indian software firms put the case for outsourcing to Home Office

Indian software and services companies are urging the UK government to relax work permit restrictions for overseas IT staff,...

Indian software and services companies are urging the UK government to relax work permit restrictions for overseas IT staff, despite concerns the UK has barely begun to recover from the biggest slump in IT employment for more than a decade.

The India Business Group, which represents 100 Indian IT firms in the UK, hopes to convince officials that British businesses will not survive international competition unless they are able to take advantage of low-cost IT services in India.

Thames Water, Thomas Cook and Oracle are among the firms which have announced offshore IT contracts in recent months, but the trend has alarmed trade unions and contractors' groups which fear it will lead to job losses in the UK. Between 20,000 and 25,000 IT jobs will transfer to India over the next three years, according to analyst firm Ovum Holway. Some US states are introducing laws to restrict the use of overseas IT workers.

The IBG plans to highlight to the Home Office the economic case for outsourcing. The government last month granted the group a place on the industry panel that advises the government on work permit policy, despite opposition from existing IT industry members.

Speaking on behalf of IBG, Rajeev Sawhney, executive vice-president of HCL Technologies, one of the largest Indian software and services companies, said it was in the UK's long-term economic interest to relax restrictions on work permits.

"If you need someone to do scoping work for two months, by the time you have got their work permit, got it stamped at the Indian High Commission and gone through medical tests, you have lost a month and a half," he said.

Manpreet Vohra, economic counsellor at the Indian High Commission, which launched the IBG, said offshore outsourcing would eventually help the UK economy. "A few individuals fear job losses. But if with those job losses companies actually manage to stay competitive and profitable, 1,000 jobs might be saved in the future," he said.

The IBG also claimed that offshore outsourcing could create new opportunities for UK contractors, provided they are willing to form dedicated contracting companies that could provide Indian firms with local expertise.

But the IT directors' forum Elite said it was sceptical about the need to relax work permits. David Rippon, former IT director at Land Securities, said Indian firms should hire more local people, given the current difficulties in the jobs market.

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