UK to outsource more high-end jobs to India

Britain's apex industry chamber said on Monday that the UK's economy gained £16 billion through offshoring in 2004 and in future more high-end work would move to India.

"British economy gains £16 billion in 2004 because of off-shoring and more British companies will outsource work to India for skills that are in short supply in the UK," Digby Jones, the director general of Confederation of British Industries, told newspersons in New Delhi.

For cheap manufacturing British companies would go to China while for high-end manufacturing and services India would be their destination, he said.

Outsourcing and India: Complete Coverage

"If in the 21st century the relationship between India and the UK can mean anything, it is ICT (information and communication technology)," Jones said.

He said the British economy was in favour of outsourcing as it frees up people in the UK, who can then concentrate on high-end work.

So far 480 Indian companies have invested in the UK and about 350 of them were IT companies, Jones said. "The Indian companies that have invested in the UK have seen stupendous growth."

The director-general said trade between India and the UK was expanding fast and would get a massive boost with the successful completion of Doha Round of negotiations at World Trade Organisation in December this year.

India-UK trade in 2003 stood at £6 billion.

For successful completion of Doha Round Japan and the US must also commit to bring down their farm subsidies and India must commit more on services, he said.

Jones said India has distinct advantages over China and other countries of Southeast Asia as a first mover in IT space.

He said India must bring down tariff barriers and subsidies and bring in more liberal rules for foreign investment in financial and other services.

"India should also continue to build on its human capital and to better its infrastructure," Jones said.

"While India is right in demanding access to markets of developed countries it should also open up to developing countries that are at a lower rung," he said.