An estimated 40 lakh (4 million) new jobs are likely to be created in India in the next couple of years as a number of foreign firms are set to shift their back-office jobs to the IT-dominated country, which is poised to be the world's next trillion-dollar economy after China.

What began as a trickle eight years ago with a decision by GE, the American giant, to shift thousands of back-office jobs from America to India, has now become a deluge.

Companies seeking to cut costs and improve services are outsourcing back-office processes, call centres and IT to India where unemployment is up to three times the level of the UK, The Times daily reported on Saturday.

A Morgan Stanley report said all over India, gleaming modern business complexes are sprouting amid the poverty and chaos. They provide vital support for companies as diverse as Prudential, P and O Nedlloyd, British Airways, Citibank and Standard Chartered. BT (British Telecom) has become the latest UK company to outsource part of its operation - provoking a union outcry.

The pace of change is expected to accelerate rapidly this year. According to McKinsey, the management consultant, outsourcing of business processing is expected to grow by 60 per cent to $2.4 billion in India this year.

The report, put together in conjunction with National Association of Software and Services Companies, which acts as an umbrella organisation for the IT industry in India, reasons that the 'shift' is a result of spiralling wages in the developed world, the decline in active workforces and a slowdown in global economy.

A report published by Deloitte Research estimates that $356 billion of global financial services will move off-shore. Much of it will go to India.

The report also pointed out that educated and English-speaking Indians have a definite edge over their Chinese counterparts.

During the past 18 months, UK-based Standard Chartered Bank has gradually transferred its back office to Chennai. The move has involved shifting 23 processing units from 35 countries.

The banking powerhouses  -- Citigroup and Hong Kong and Shanghai Banking Corporation -- are also in the throes of transferring jobs. Citigroup, which now employs 3,000 people in India was quick to spot the country's potential.

During the past 5 years, costs at Citigroup have grown by only $12 billion while revenue rose by $35 billion, making it the most profitable financial services company in the world.

HSBC, its competitor, has now moved 2,000 jobs to India in a process that looks certain to continue.

Sir Keith Whitson, group chief executive, caused an outcry in UK last year when he extolled the virtues of the employees in India, compared with those in Britain.

According to McKinsey a survey of 917 companies found that 40 per cent of respondents had more than one million dollar earmarked for upcoming offshore service initiative.