"Wages are being undercut by companies bringing over Indian workers, who are put up in hostels and paid poorly," Ann Swain, chief executive of the Association for Technology Staffing Companies (Atsco) told the Daily Telegraph.
According to her, salaries for certain IT workers have fallen in recent months.
Home office immigration figures show that 21,448 foreign IT professionals have been issued work permits this year, an increase of 15% in 2004 and almost double the level five years ago. Of those, 85% now come from India.
Separate research from Payscale, a pay monitoring firm, shows that an experienced software programmer in India receives £6,600 a year compared with £33,000 for his counterpart in the UK.
After paying their travel, permits and living expenses, the Indian workers are "charged out to clients at around half the rate asked for a similarly homegrown IT expert (350 pounds a day against 650 pounds)," Elizabeth Gordon-Pugh of outsourcing consultant Alsbridge has estimated.
"One Indian supplier operating in the UK has around 80% of its 2,000 plus staff comprised of Indians on assignment from a few weeks to several years," the daily quoted her as saying.