United Kingdom strongly supported free movement of services and people, and hence, was in favour of off-shoring to India, Patricia Hewitt, British secretary of state for trade and commerce and industry, said in Kolkata on Wednesday.

Speaking at the CII Partnership Summit, Hewitt announced that a major healthcare initiative with UK funding was in its final stages of negotiation.

The role of the government, she said, did not include following a protectionist policy, which is what preventing off-shoring would amount to.

Outsourcing and India: Complete Coverage

"At present, the off-shoring focus in India is on service sector jobs. We have heard understandable cries of anguish from those who have lost their jobs in the UK. We cannot preach liberalisation on the one hand and protectionism on the other," Hewitt said.

The UK and India were close to reaching a common ground on access for finance, health and law professionals and institutions so that Indian firms could service their clients in the UK and European Union while UK firms could work with their clients in India.

"I expect this to happen from my understanding of the general direction of Indian reforms," said Hewitt.

She mentioned business professional services, care services, the education sector and health services as areas where an agreement on access was expected.

She said access could improve for small and medium enterprises of both countries in fields like health technology, bio-technology, pharmaceutical products and food technology.

"India could help the UK cope with the problem of providing healthcare to its aging population," she added.

In manufacturing, Hewitt said India was now seen as a base for all types of value-added outsourced manufacturing and not as a base for only low-end value-added products.

She said a major healthcare project would be announced very soon and it was likely to be under the aegis of the UK aid agency DFID.

While recognising the importance of offshoring was one element of overseas investment, she said British investment flow in India could grow substantially.

"One of the main reason is that British companies sometimes believe that it is easier for them to invest in markets other that India. That is why I welcome the creation of the Indian Investment Commission," she added.

Hewitt said trade between India and UK was inadequate. It could grow if UK and India could work together on projects like the postal system, as the UK Royal Mail had been completely turned around and made profitable with in-house expertise and could offer the skills to the Indian system, Hewitt said to illustrate her point.

"In the past decade the relationship between India and UK has grown rapidly. Both countries are hungry for more. The purpose of the Joint Economic & Trade Committee declaration proposed to be signed in Delhi tomorrow is to improve our bilateral trade and investment relationships," she pointed out.

The main objective of JETCO will be to identify ways of improving the bilateral trade and investment relationships. The trade between two countries now stands at �3.5 billion.