//IT outsourcing row grows

IT outsourcing row grows

Indian IT worker

Indian IT workers help rather than hinder Europe, Indian firms say

India’s campaign against efforts by some Western countries to limit the transfer of technology jobs to Indian immigrants and to outsourcing firms in India itself is gathering pace.

At the same time, a campaign in the UK against loopholes remaining in the country’s recent clampdown on visas for foreign IT workers – much in demand for a combination of high skill levels and relatively low salaries – is believed to be intensifying.

The chief of India’s number one IT lobby launched a campaign on Thursday to fight back after several US states proposed bans on outsourcing to save jobs at home.

But he stressed that the US plans were about trouble at home, not an attack on India itself.

"There are a spate of anti-outsourcing bills that are mooted in the US," Som Mittal, chairman of the National Association of Software and Service Companies (Nasscom) told a conference in the IT centre of Bangalore.

"It has more to do with the depressed technology conditions worldwide, and is not a concerted backlash directed against India, as it has been perceived."

Government action

Even so, the issue is gaining traction, with Indian Commerce and Industry Minister Arun Jaitley acknowledging plans to lobby US Trade Representative Robert Zoellick over the proposals.

Mr Jaitley told the Hindustan Times that the plans would amount to a restraint of trade – and were particularly unfortunate given attempts by developed countries to get the developing world to open up its markets to international competition.

And the Ministry of Communications and Information Industry made it clear that whatever the fate of the laws planned for Maryland, New Jersey and Connecticut, the outsourcing trend was irreversible.

"The stark reality of the cost advantage makes it profitable," said ministry secretary Rajeeva Ratna Shah, "and if they do not realise it, (firms resisting it) will cease to exist.

"It is a choice of losing some jobs, or losing all the jobs."

In spirit

But while Mr Jaitley was fending off the US, in the UK the issue of both outsourcing and of fast-tracked incoming staff – a hot issue among some local IT workers – was returning to the fore.

Ten months on from the UK’s decision to take IT specialists off its list of occupations suffering a staff shortage, UK IT contractors are accusing firms of taking advantage of a loophole to keep hiring foreign staff in place of British ones.

At fault, Professional Contractors Group council member Gurdial Rai told the Times of India, was the Intra-Company Transfer (ICT) scheme, which allows companies to move staff between countries as long as they stay with the same firm.

"The scheme is being abused," Mr Rai told the Times of India, by employees working on third-party sites in contravention of the spirit of ICT.

The argument in the UK has gained momentum in recent weeks with revelations that companies including BT are planning to move services jobs in areas such as directory inquiries to India as a cost-saving measure