India has told Britain that by tightening norms for skilled foreign workers it was mixing up Intra Company Transfers (ICTs) with immigration and this could affect bilateral ties.
The commerce ministry, while awaiting a response from the U.K. Government on the issue, will seek legal advice on whether the new guidelines on ICTs discriminate against India and are inconsistent with the World Trade Organisation’s (WTO) General Agreement on Trade in Services, official sources toldThe Hindu
The move comes amid concerns by Indian tech firms which are worried that the tighter norms for foreign skilled workers would chip away at their bottom line.
The Indian IT/ITeS sector is mainly affected by the stipulation that from April 2017 onwards a company (including India-based), looking to bring a worker into the U.K. for short duration, specifically to carry out the work of another organisation, will have to pay them a minimum annual salary of £41,500. This minimum threshold represents a 67 per cent increase from the extant limit of £24,800.
Gagan Sabharwal, Director (Global Trade Development), Nasscom said: “The reforms proposed include significant salary rises, levies and restrictions that will distort the U.K. market, restrict access to the much-required services and increase costs for all.
“These negative impacts are not balanced with any upside: they will not achieve either of the government’s aims of a decrease in migration or an increase in U.K. skilled workers but definitely negatively impact overall UK productivity.”
Mr.Sabharwal said some of the Indian companies could even consider shifting from U.K. to elsewhere in Europe if Britain makes it expensive for them to do business.
“Instead of penalising firms through higher salary thresholds, the U.K. government should make them partners in skill development initiatives,” he said.
It was found that Indian IT workers account for over 90 per cent of migrants in the category known as “ICTs for third-party contracting”.
Noting that skilled migrant workers have helped in boosting its economy and reducing the costs of companies, Britain, however, said the skilled worker visa “reforms” were taken to safeguard employment opportunities for its residents as well as to bring down the reliance of the U.K. enterprises on skilled labour from other countries.
Commerce Minister Nirmala Sitharaman had recently raised this issue with the U.K. The sources said she conveyed to the authorities that the move clearly amounted to mixing up ICTs with immigration.
Noting that it will affect India the most, the minister, according to the sources, cautioned the U.K. officials that this matter could hit bilateral ties if it is not amicably and expeditiously resolved.
The ministry will soon send to the U.K. Home Office and the U.K. Immigration Minister James Brokenshire, the Indian IT/ITeS industry body Nasscom’s suggestion that the higher salary threshold should be made effective in a phased manner – with annual smaller hikes over a five-year period till April 2021.
The new norms also state that from autumn 2016, all intra-company transferees will be required to pay the Immigration Health Surcharge. The U.K. will review the extent to which allowances may be counted as salary to ensure it has appropriate safeguards in place against undercutting of the resident labour market.
However, to provide flexibility, the minimum salary threshold for intra-company transferees working in the U.K. for between five and nine years has been reduced from £155,300 to £120,000.
2015 Kashmir Despatch