The limit placed by the David Cameron government on the number of professionals British firms can hire from outside the European Union is preventing the recruitment of key employees from India, according to the companies.
General Electric, one of the major employers in Britain with 18,000 workers, has complained that it has been unable to hire a stem-cell research executive from India because of 'very, very small' quota has been given to the company to hire people from outside the EU.
It has also not been able to hire gas-turbine engineers from outside the EU due to the annual limit placed by the government.
The cap has currently placed at 24,100 until April 2011, by when a permanent cap will be in place.
General Electric is the latest in the list of companies that business secretary Vince Cable says have been prevented from hiring the required skills from outside the EU because the skills are not available locally.
Mark Elborne, General Electric's national executive for North Europe, told The Sunday Telegraph: "It is very difficult to make planning decisions and to know where to allocate people if you have a limitation on the number you can bring in."
"We can't be prevented (from doing business) by some cap that is simply not reflective of our needs... That is not just an inability to grow but it is damaging future long-term prospects. The UK simply has to stay competitive in an open, global market place," he said.
According to Cable, the annual cap is already affecting the country's economic recovery.
Placing an annual limit on the number of Indian and other non-EU professionals who could come to Britain for work is one of the major items on the coalition government's agenda. The plan, however, has been opposed in several quarters.
Cable said the cap was leading to companies moving jobs overseas because they are unable to hire key personnel.
He told The Financial Times: "A lot of damage is being done to British industry. I've got a file full of examples. This is not just people whingeing."
Cable said he was committed to the coalition's plan for a permanent immigration cap but wanted to see it applied flexibly.
Complaints had been received from investment banking, engineering and pharmaceutical sectors.
Cable said that in one instance a UK company needed 500 specialist engineers but was given a quota of four.
He mentioned an entrepreneur who abandoned plans to open a factory and create 400 jobs in north England after failing to secure visas for key staff.
