Cameron's passage to India opens door to govt ICT offshoring?

The Prime Minister made his comments during a visit to the campus of Indian outsourcing firm Infosys Technologies during his trade visit to India this week.  "We are reviewing contracts, we are looking at what we pay for the services we have received. It is like any other business," he said. "In terms of being open to outsourcing ... you will find Britain one of the most open and progressive countries.”

 

It's possible that Cameron was being polite at a politically sensitive moment. The Indian media has been speculating in recent weeks that firms such as Infosys would suffer as a result of the UK government's plans to slash spending, although others have predicted the reverse. Infosys earns over 10% of its more than $4.5 billion revenues from its UK operations.

 

But if the Prime Minister genuinely is open to offshoring government work, it will signal a major shift in policy as offshoring work by HMRC and the NHS has already sparked controversy. Public sector unions would also be unlikely to support such moves. 

 

Cameron was keen to play up the trade links between the UK and India.  "I want this to be a relationship which drives economic growth upwards and drives our unemployment figures downwards," he said, speaking in the Indian IT hub of Bangalore."This is a trade mission, yes, but I prefer to see it as my jobs mission."

 

In a speech during his visit to Infosys, he asked his audience: “Why is your country important for Britain’s future? The most obvious reason is economic. There is still a development road to travel but thanks to the reform process begun by Manmohan Singh in the 1990s, the Indian tiger has been uncaged and its power can be felt around the world. And we can feel that power back home too. The Tata Group is now the largest manufacturing employer in Britain. And more than 180 Indian companies have invested in our IT sector.”

 

Cameron also attended the signing ceremony of the UK’s business process outsourcing firm Xchanging Plc and the Karnataka government.  The deal involves the world’s largest back office company expanding its activities to Shimoga, where it will open a 2,000-seat processing centre. Xchanging employs over 3400 people in India and has three of its top ten global processing hubs in Bangalore, Gurgaon and Chennai.

 

Cameron commented: "This latest news showcases the very best of UK and Indian ingenuity and creativity. My government is keen to lay the foundations of an enhanced relationship between Britain and India for the decades to come, and Xchanging has demonstrated here in India what can be achieved by British companies when successfully opening up new markets around the world".

 

The Prime Minister is accompanied by 39 executives from companies such as BAE Systems Plc and Vodafone Group Plc, who are exploring expansion possibilities in India.