APPENDIX 20
Memorandum by Morgan Walker
We write to you with reference to the inquiry
into trade and investment opportunities with India. We would like
to focus on the role of the UK government in assisting businesses.
We, being an English law firm with perhaps an
exclusive right of practice in India, deal with a diverse range
of corporate and commercial matters, both contentious and non-contentious.
This includes banking, finance, capital markets, dispute resolution,
commercial property, intellectual property, information technology
and bulk business immigration. We have a number of Indian corporate
clients, many of them having assumed global outreach with growing
business interests in the UK.
The Agreement between the Government of United
Kingdom of Great Britain and Northern Ireland and the Government
of the Republic of India in 1995 for "The Promotion and
Protection of Investments". Article 3 (1) of the Agreement
states "Each Contracting Party shall encourage and create
favourable conditions for investors of the other Contracting Party
to make investments in its territory, and admit such investments
in accordance with its laws and policy."
A look at the immigration regime reveals a number
of constraining factors which work to the detriment of Indian
inward investors into the UK. We summarise them in the following
paragraphs:
Article 4 (1) provides that each Contracting
Party shall accord to investments of investors of the other Contracting
Party, including their operation, management, maintenance, use,
enjoyment or disposal by such investors, treatment which shall
be not less favourable than that accorded either to investments
of its own investors or to investments of investors of any third
State.
India one of the largest inward investor into
the UK and despite being a Most Favoured Nation it still has to
face problems relating to work permits and visas which hinders
Indian investors in increasing investments. It is asserted that
being most favoured nation, the clause would automatically entitle
Indian citizen's similar treatment that to the EU citizens in
respect of travel or work and the immigration regime should be
exactly similar.
There has been a continuing shortage of skilled
workforce in the UK, in both the IT and Hospitality sectors. Due
to this reason the IT and the Hospitality sectors have been drawing
upon human capital by way of skilled professionals and specialists
from India through "Intra- company Transfers" as well
as direct recruitment through the "advertisements" route.
The Home Office's reluctance in issuing work
permits to new companies who have recently opened their branches
in the UK has led to significant losses for companies and delays
in realising their investments.
The UK Government, on 19 July 2005 launched
the Consultation document on "Selective Admission: making
migration work for Britain". Under this consultation, the
government has proposed to introduce five separate tiers in the
work permit application, which will seek to regulate entry into
the UK for work, study and to train. We are concerned that this
will only narrow the selection process further and will in effect
result in more rejections.
Regarding proposal for changes in immigration
rules, they raise many concerns as summarised below:
People from India, generally, come to the UK
as visitors, investors, highly skilled migrants, work permit holders
and students. The fees and expenses met by people under these
categories at the mission offices are very high and it causes
a heavy burden on people from a country like India. Furthermore
when they apply for extension of stay they inevitably face heavy
expenses again.
There are new proposals requiring execution
of bonds to ensure their return. Though it is not yet clear what
would be the impact of such a proposal, it is a major cause of
concern. It will impose heavy and unjustified penalties on Indian
businesses which have been contributing to the dynamism of the
UK economy and seem an unfair and discriminatory provision. It
will cause further divergence from the provisions of the bilateral
treaty on protection of investments which enjoin equal treatment.
We do hope that discriminatory policies are not applied with regard
to Indian nationals, as India is now widely acknowledged to have
a dynamic and growing economy with which developing relations
will be beneficial to the UK.
Significantly, there have been no such constraints
faced by British nationals who now travel to India in hundreds
to take up jobs.
Although on one side it is said that the UK
government is promoting investors from India and their business,
on the other it seems to be creating a number of constraints.
Investors after investing huge amounts are sometimes harassed
by the procedures and expenses involved.
To safeguard business interests, inward investors
have to bring in personnel for key positions on whom they have
confidence and trust. For this they may have to recruit or transfer
people from India having the requisite skills and knowledge of
the business and on whom they can confide to help in the growth
of the business.
But such efforts are often hindered by rejections
or long drawn procedural delays at the immigration department.
Such applications are often refused on minor grounds like the
perfection of advertisement and the place where the advertisements
are made in the UK. Appeals are often not allowed and if they
opt for a review, it may cause further long delays to get a decision.
Some of our clients', especially from the IT
or the Hospitality (especially Indian cuisines) sectors, have
been refused work permits on one ground or the other. They are
all very reputable companies in India and have opened their branches
in the UK to provide their expertise and help the UK industries
to grow. They have brought into the UK large investments from
which the UK as a country has reaped substantial benefits.
Students who come to study in the UK are charged
higher fees than home students for the same course.
We would like to add further that for free movement
of goods and services, the immigration regime should be suitably
relaxed so as to provide opportunities for more experts and professionals
from India to cater the ever burgeoning needs and requirements
of Trade and Industry. India has a huge human capital to offer
in this regard.
We shall be pleased to provide further inputs,
which we might be able to help you in this regard.
9 January 2006
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