So to UK policy makers it is perhaps cheering that two-way trade of goods and services between India and the UK has doubled since 1993. UK-India bilateral trade of goods and services was £6.3 billion in 2004.

UK companies tend to sell big projects like dams, power stations and telecommunications infrastructure while the smaller companies buy a vastly larger number of individual manufactured products. The UK is India’s fourth largest trading partner after the USA (10.5 per cent), China (6.1 per cent) and Belgium (3.8 per cent).

The goods sent to the UK amounted to nearly four per cent of India’s total foreign trade in goods in 2004/05. The prevailing economic orthodoxy adopted by the Indian government over many years has been one of self-sufficiency, governmental control of manufacturing industries and import substitution.

For most small and medium size British companies it means it is much easier to source cheap materials and manufactured products from India than it is to try and sell there. It is the high added value, intellectual property-rich operations like construction and architectural practices delivering turnkey solutions to major projects that make up the bulk of the traffic in the other direction.

India has been able to expand its economy very quickly, but because of the protection from foreign competition the productivity rates have been low. There are thought to be more than 300,000 people working in Indian call centres supporting British industries, including insurance and investment companies.

Times are proving difficult for the Indian outsourcing industry despite record turnover in 2005 for UK offshoring. The UK's banking regulator, the Financial Services Authority, declared that customer data was safe offshore in India, then a series of data security breaches occurred. First was the theft of $350,000 from the accounts of US Citibank customers by Indian call centre staff, followed by two successful security breaches by journalists.

The Sun managed to obtain UK customer bank details from a call centre worker in India while the Australian Broadcasting Corporation current affairs programme Four Corners was able to obtain not just the names and addresses of Australian customers, but also their telephone numbers, birth certificate details, Medicare numbers, driver's licence numbers and ATM card numbers.

While the breaches can not have done the reputation of the Indian call centre industry much good it seems unlikely that the security breaches were more than the kind of embarrassing invasion that can happen to financial institutions in all parts of the world. More significant are the increased number of UK companies that now boast in their advertising that calls will be answered in the UK.

DirectLine and NatWest have run campaigns emphasising that customers’ calls will be answered by UK-based staff. It seems that Indian call centres suffer from high staff turnover rates, just as many of their European counterparts.

Research company Key Note puts the annual attrition rates in some call centres at 40 per cent and said disaffected Indian workers see it as a dead-end job, despite the relatively high salaries.

"Few staff stay long enough to acquire detailed knowledge about the organisation they are paid to represent," says the report on the Call Centre business published in January 2006 .

Last year, the National Outsourcing Association, said: "If companies had their fingers burnt through offshoring, the likelihood is they leapt on to the offshoring bandwagon without having the correct procedures in place."

However, it appears that this is one economic story that will keep on building.

Indian Economy

GDP: - $3.746 trillion (2005 est.)
GDP per head: - $3,419 (2005 est.)
Annual Growth: 8.1% (2005/06 est.)
Inflation: 4.5% (2005 est.)
Major Industries: Textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, gems and jewellery, leather manufactures.
Major trading partners: Export: US 16.7%; China 5.8%; Singapore 4.8%; Hong Kong 4.6% ; UK 4.5%. Import: China 6.3%; US 5.9%; Switzerland 5.4%; Belgium 4.3%; Germany 3.6%; Australia 3.3%; UK 3.2%
Aid & development: Total external development assistance for 2003/04 was $3.9 billion
Exchange rate: Indian rupees per UK Pound Sterling – 77

(Source: Foreign and Commonwealth Office)

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