India is set for a huge employment boost as large financial services groups continue to export jobs to cheaper locations, according to a report.

The country is set to remain the top choice for outsourcing IT and back office work, according to Deloitte Research.

The report predicts two million jobs will move offshore from the world's 100 largest financial services companies over the next five years.

It says India could account for up to a million of the new positions thanks to its dominance in IT and software development.

Deloitte says pressure to cut costs in order to remain competitive is driving the trend.

Cost savings

India has already dominated the early market for companies choosing offshore processing - thanks to its large number of graduates with English-language skills but lower salary expectations.

The offshore bonanza has huge potential with transformational consequences for the industry Deloitte Research

Large companies including Citigroup, HSBC and GE Capital have opened vast call centres or back offices in India, each employing between 2,000 and 11,000 employees.

But Deloitte predicts that the trend will gather momentum in the next two years, as leading financial services groups seek to generate substantial cost savings.

"The shifting of activities to lower-cost locations ignites the possibility of transforming the structure of the financial services industry," suggested its report.

It predicts nearly three out of four major financial institutions will be offshore within two years and that India will be the top choice for almost half of them.

"Our work suggests India is likely to continue as the key offshore destination."

The investment bank JP Morgan, for example, announced earlier this week that it is moving some of its economic research work to Mumbai, formerly Bombay, in India.

Get it right

Deloitte adds that other possible candidates for outsourcing include China, South Africa, Singapore, Malaysia and Australia.

It said the trend allows companies a "once in a generation opportunity" to reduce costs.

The survey predicts more and more functions will be moved overseas as the move continues.

In India, it expects the current emphasis on IT jobs to make way for other business processes, including coding and programming.

However, it warns companies preparing to take the plunge overseas to choose their destination wisely.

"Get it right first time.

"Those financial institutions that moved offshore too quickly are operating on a sub-optimal basis."

Getting it right, on the other hand, can yield dividends.

"The offshore bonanza has huge potential with transformational consequences for the industry."