Global Economics

Indian IT Companies Face New Immigration Hurdles


In Britain, groups allege outsourcing companies from India are taking advantage of immigration laws by replacing local workers with overseas staff

UK, one of the top export markets for India's over $40-billion software industry, is evaluating stricter immigration rules proposed by the Migration Advisory Committee (MAC) after several British trade lobbyists and workers alleged that Indian tech firms are replacing local workers with overseas staff at lower salary levels.

Top Indian tech firms including TCS, Infosys, Wipro and Tech Mahindra serve British customers such as BT, British Petroleum and British Airways by sending Indian professionals to the country on short-term project assignments. With more stringent norms, these companies may have to employ more local UK workers instead of sending their Indian staff for onsite projects.

Anti-offshoring lobbies including Unite and the Association of Professional Staffing Companies (APSCo) allege that Indian tech firms are misusing the 'intra-company-transfer' rules by replacing UK workers at wages lower than prescribed levels in the country.

The MAC report submitted by the committee's chairman Professor David Metcalf to UK's Home Office on Wednesday has recommended that the threshold salary levels for allowing entry of a graduate skilled worker be raised from around £17,000 currently, making it tougher to earn points needed for allocation of work permits.

"We believe that the earnings thresholds should rise in line with earnings inflation. We recommend raising the minimum threshold for gaining 10 points to £24,000 per annum, and raising the minimum threshold for gaining 15 points to £28,000 per annum," the MAC report added. These figures compare to £20,000 and £22,000, respectively, under the current system.

Last year, UK granted around 45,766 work permits to workers coming to the country through intra-company-transfer route, a majority of them awarded to the IT professionals. The majority of intracompany transfers are for Indian nationals, who account for 69% of the permits granted through this route.

Almost half (48%) of intra-company transfers are for Indian nationals in just one occupation—software professionals . "Companies are even allowed to pay these workers offshore in foreign currencies, so intra company transfers are potentially very easy to exploit in order to bring cheap foreign labour into the UK," Ann Swain, chief executive of APSCo said in a recent statement.


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