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We won't bar BPO: UK minister

Priya Ganapati in Mumbai | February 04, 2004 12:55 IST
Last Updated: February 04, 2004 12:58 IST

Stephen Timms UK's minister for e-commerceDelegations and representatives from the United Kingdom have become a fixture at Nasscom's annual conferences.

For the last two years, representatives from the UK government have come to India canvassing for investments from India's IT companies and listing out Britain's virtues as a trade hub as been pretty much the agenda at the sessions.

This year was no different.

At the inaugural session of the Nasscom annual event, UK minister of state for energy, e-commerce and postal services Stephen Timms put forth the same ideas as his predecessor who came to the event last year -- namely that the UK with its sophisticated markets and geographical advantage as the gateway to Europe would be a great destination for Indian IT companies.

  • But now Timms had another important message to give to an increasingly jittery IT industry in India.

    "Despite what the newspapers say, we are not going to put barriers to protect UK firms from tough competition from India. We know those Indian competitors will benefit the British economy and strengthen it," Timms said.

    His assurance assumes significance in view of the recent upheavals in the UK over the outsourcing issue. Even as a number of majors like HSBC and Prudential have said that they will move back office and call centre jobs to India, British unions have come out strongly against this.

    British unions are protesting the loss of jobs to India. But Timms says that the UK "believes in a free market and we practice what we preach."

    Apart from business process outsourcing services, Britain has also emerged as an important market for Indian software services companies.

    The UK software sector employs over a million people and was worth over 5 billion in 2002.

    Tata Consultancy Services is a major investor in the UK. Recently, Tata bagged a significant share of a huge contract with the UK National Health Services worth 896 million when it bid for the project as part of a consortium led by Fujitsu.

    Mastek, another key IT services player, has won a contract for 60 million.

    Apart from the giants, a number of smaller companies too are exploring the UK market. Of the 450 Indian companies that have invested in the UK, over three-quarters are in the IT sector.

    "These companies have recognized the potential for growth that UK offers. They have seen the size and sophistication of the market and they see UK as the best springboard into Europe," says Timms.

    While Timms has assured Indian companies that the UK government will not cave into demands to restrict offshoring, he says that India must reciprocate by opening up its markets.

    "Trade and investment must be a two-way street. India hasn't quite made the leap to an open-market economy and British service providers are sometimes frustrated by the red tape and restrictions. I ask you to embrace the open market," says Timms.

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