Prudential PLC is the latest in a line of British companies to relocate its phone-based customer support operations to India, in spite of worker union efforts to prevent it from doing so. Opening back offices and call centres in India over the past five years have been other giants such as AT&T, General Electric and HSBC mainly in Delhi and Bangalore-the Silicon Valley of India-and Royal & Sun Alliance, bupa and Churchill Insurance among others.

The move out of Prudential's call centre from Reading, however, has evoked strong reaction and employees are planning to take the firm to the industrial tribunal for the loss of 1,000 jobs. Never before, according to the trade union, Amicus, have so many jobs been taken away at one go. "In the past, it was mainly back office operations that were taken away," says a spokesperson for Amicus. "If Prudential is allowed to move its call centre to Bombay, other financial services in the UK will follow suit. Who will give our people jobs?" he asks.

ONLINE: A call centre near Delhi

The management consultancy firm Accenture has predicted that 3,40,000 British insurance jobs could be transferred to the subcontinent by 2010.

Prudential's exposure to India is not new. Already dealing with ICICI, it is aware of the resource and capability of the country. Says Daooagh Leeson, deputy head media relations, Prudential: "By transferring operations to India, we can optimise our capacity for delivering customer service." The advantages he cites are India's large graduate population fluent in English, the competitive cost factor, its geographical placement and the time difference, which allows India to take calls while most of the West is sleeping.

The average rate of pay is around Rs 8,000 (£105) to Rs 10,000 (£132) a month. At £2,500 a year, the salary of the regular Indian call centre worker is about £10,000 less than that of an equivalent worker living in Britain! The savings that companies make on the wages more than covers the cost of diverting a customer's call from the UK to India.

Justifying its decision to move its call centre, Prudential says that in a recession a firm has to find ways to cut costs and that if the labour market changes then so does the pattern of work. The honeymoon of Indian it workers with the world's corporates is far from over.