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Increased oversight on work visa regime in countries like the US, competition from new players in Eastern Europe and lack of skilled manpower in digital technologies are among the key challenges for the Indian IT- BPM sector, the Economic Survey-II on Friday said.
The survey, tabled in Parliament on Friday, said the Indian $150-billion IT-BPM industry is "feeling the pinch" of the global slowdown and political uncertainties as clients go slow on decision-making and investment processes.
"Misconstruing mobility of skilled people as immigration issue is a deterrent to the growth of this global business resulting in many barriers to free movement of skill and data in the major markets," it said.
The survey cited examples of countries like the US, the UK and Australia that are undertaking various reforms in their work visa programmes to protect the interests of the local workers.
Also, the EU has introduced 'Data Protection and Privacy Rules' that effectively prevents Indian companies from providing services from India, while the US has been given safe harbour status, the survey noted.