The issue came up for discussion during the meeting of Commerce and Industry Minister Anand Sharma with UK Secretary of State for Business, Innovation and Skills Vince Cable and the Chancellor of the Exchequer George Osborne.
However, Osborne assured Sharma that the British government has decided not to make any change in the 'Intra Company Transfers' for the next two years. The proposal had upset the Indian IT industry and the government as it meant that the professionals on intra company transfers to UK would be treated "prospective immigrants".
Sharma said this rule has badly affected the performance of Indian companies operating in the UK.
"Sharma also expressed concern that this move may force Indian companies, especially IT companies to relocate to other European capital," an official statement said.
The Minister also raised the issue of the restrictions imposed on non-EU immigration into Britain which is adversely affecting the operations of Indian companies here.
"He specifically referred to the UK Border Agency treating Intra Company Transfers of IT experts, professionals and highly skilled workers as prospective immigrants which has affected has badly affected the performance of Indian companies operating in the UK," it said.
Besides, Sharma also expressed concern over the issue that Indian companies who want to acquire UK firms have been facing considerable delay and long legal hassles.
"He highlighted the concerns of Indian companies who want to visit UK for business meetings and also the long delay in obtaining a visa by Indian nationals," it said.
He said Indian experts coming to the UK leave the country after completion of their contractual obligations with their employers in the UK and "therefore, they cannot be treated as economic migrants".
Highlighting the vast contributions of Indian professionals to the UK economy, Sharma said that stoppage of post -study work permits to students has not found favourable to Indian students who are not able to recover the cost of their education in the UK universities and therefore, they are now looking for options to study in other countries.
"He stressed that this development is expected to impact the UK universities where at present over 40,000 Indians students have been studying," it added.
Sharma was here for the 8th round of India-UK Joint Economic and Trade Committee (JETCO) meeting.