UK plans curbs on visas to check third-party contracting by Indian IT

The restrictions proposed include a new skills levy of 1,000 pounds per year per non-EU professional hired, a higher salary threshold and a new route for third-party contracting under the Intra-Company Transfer (ICT) visa route that is most used by Indian companies.

Focussing on the growing phenomenon of third-party contracting by Indian IT companies with offices in Britain, an influential government committee has recommended new curbs as part of ‘significantly reducing’ the migration of skilled non-EU professionals.

 The restrictions proposed include a new skills levy of 1,000 pounds per year per non-EU professional hired, a higher salary threshold and a new route for third-party contracting under the Intra-Company Transfer (ICT) visa route that is most used by Indian companies.

In a review of the work-related Tier 2 visa, the Migration Advisory Committee (MAC) of the Home Office specifically mentioned the Indian IT sector which, it said, was transferring a large number of employees but was not benefiting the UK work force.

The review said: “Indeed, partners told us that India currently has a competitive advantage in training IT workers and in the time it would take to fully upskill the native population, technology would have moved on”.

“We were told that this is unique to the IT sector. We are aware of the announcement that the British Council and Tata Consultancy Services will provide one-year internships for 1,000 UK graduates between 2016 and 2020. But on the basis of the evidence we received, the traffic looks one-way at the moment”.

The new skills levy of 1,000 pounds is expected to raise millions of pounds to help develop skills in Britain. Indian professionals were given the largest number of visas under Tier 2 in the year ending September 2015.

Indian IT workers accounted for 90% of visas issued under the ICT route.

The MAC review was commissioned by Prime Minister David Cameron last year as part of plans to reduce net migration into Britain. MAC recommendations are usually accepted by the Home Office.

The report singled out India and the use of Indian IT workers in Britain for servicing ‘third-party’ clients and projects. It recommended a new route for ‘third-party contracting’ under the ICT route, with a high salary threshold of 41,500 pounds.

The review said: “Focusing specifically on the use of the route within the IT sector, we have not seen evidence that the third-party contracting use of the intra-company transfer route is contributing to the stock of IT skills within the resident UK workforce”.

 (Immigration) is not serving to increase the incentive to employers to train and upskill the UK workforce. Ready access to a pool of skilled IT professionals in India is an example of this.

We did not see any substantive evidence of long-standing reciprocal arrangements whereby UK staff are given the opportunity to gain skills, training and experience from working in India”.

 The MAC noted that “some of the heaviest users of the intra-company transfer route are Indian companies, and the top ten employers using the intra-company transfer route are all largely employing IT workers from India”.

 It said: “The evidence indicates that multinational companies with a presence in India have developed a competitive advantage in delivering IT projects in the UK. They have developed a delivery model, whereby significant elements of projects are delivered offshore in India, taking advantage of the fact that Indian salaries are lower than in the UK for equivalent workers”.