Qantas the latest in list of companies to outsource jobs to India

Qantas's announcement to shift 850 local jobs to India is the latest in a wave of white-collar jobs moving offshore.

Some of Australia's biggest companies are outsourcing jobs to India.

India has marketed its large, mostly English-speaking workforce to businesses for decades, but the nature of the jobs has changed.

From clothing to credit cards, some of Australia's largest companies are shifting hundreds of jobs overseas, and the trend is not slowing down.

NAB, Westpac, Telstra, Bank of Queensland, Coles, Officeworks and Qantas are among companies that have announced plans to cut Australian jobs and move roles to Asia in recent years — most under so-called global capacity centres (GCCs).

GCCs are subsidiaries of foreign companies that allow them to maintain full control of their business rather than contracting a third party.

Bunnings announced plans for a GCC in India in 2020, but has not yet announced job cuts. Kmart opened one in 2018.

The companies said roles needed to move to cope with rising costs and the rapid adoption of artificial intelligence (AI).

The Finance Sector Union has called the cuts "callous" and "ruthless" in the face of soaring corporate profits.

India is home to about 50 per cent of the world's GCCs, the latest evolution of offshoring, which began with contracting out call centre work decades ago.

In 2024, Australia's high commissioner to India, Philip Green, estimated Australian companies directly employed about 30,000 people in Indian GCCs.

"In very simple terms, a GCC is setting up another office for a company. Instead of hiring contractors, you're hiring employees," said Lalit Ahuja, the chief executive of ANSR, which helps companies establish GCCs in India.

Mr Ahuja said tighter immigration restrictions were accelerating the trend.

Rather than waiting for skilled workers to migrate to Australia, he said, companies were moving operations to where the talent was.

The shift could eventually extend to senior executives.

"It's quite conceivable that one day for a large Australian company, they may have some key leaders sitting in Bangalore or Hyderabad," Mr Ahuja said.

Arya Roy Bardhan, a junior fellow at the Observer Research Foundation in Kolkata, said that while India did offer skilled workers, it was the cost savings that attracted foreign companies.

"If you're comparing India with Australia, the average wage is one third of what you have to pay in Australia," he said.

"The only incentive for opening a GCC in India is cost savings. It's lower tax rates and major savings in wages."

Dr Kanupriya, an assistant professor in the Department of Economics and Trade Policy at the Indian Institute of Foreign Trade, said it was a combination of both.

"It's a cost-saving measure, and it taps into the diverse talent pool that India has to offer."

A big part of that is the sheer number of potential employees available.

India has marketed its large, mostly English-speaking workforce to foreign businesses since the 1990s, offering cheap wages and tax breaks to offshore companies.

By the early 2000s, more technical jobs shifted to the country as India prioritised tech and engineering graduates.

With the world's largest youth population and about 830,000 engineering and technology graduates annually, according to India's Ministry of Education, creating jobs is a major priority.

"Post-COVID, people realise this workforce has the skill and technical expertise needed to work with new products and even innovate," Mr Bardhan said.

Time zones also did not matter when the work was not customer service.

"Now you want us for tasks which can be done overnight, we don't have to operate at the same hours," he said.

Before COVID, Mr Ahuja said his pitch to foreign companies was "anyone, any work, anytime, anywhere".

With remote work normalised, companies became more comfortable running operations across borders.

"You can run the company from India and have stores in Australia," Mr Ahuja said.

The fierce competition for jobs between India's states was also attracting companies.

Bengaluru in the state of Karnataka has long held the title of India's Silicon Valley, but incessant demand has expanded GCCs into at least seven other states.

Indian Finance Minister Nirmala Sitharaman said earlier this year the country was home to more than 2,100 GCCs employing 2.3 million people.

Mr Ahuja predicted more Australian companies would establish Indian operations over the next three years.

While Australian businesses have been slower to embrace GCCs than their US counterparts, he believed they could benefit from adopting more advanced models.

"Australian companies are using this as a leapfrog moment," he said.

And offshoring may no longer be confined to major corporations.

He said ANSR had already spoken to startups considering GCCs with as few as five employees.

The expansion of GCCs comes as AI raises questions about how long some of these offshore jobs will last.

Mr Ahuja acknowledged AI would allow businesses to complete more tasks with fewer workers, potentially affecting roles in software development, accounting and administration.

"The work itself will change. Who does the work will change. How the work gets done will change. And where the work gets done will also change," he said.

Mr Bardham said some sectors would need employees who could assess risk and teach AI, but only in the short term.

"If you look at GCC data, you'll find that revenue is growing faster than headcount, so workers are getting more productive. If that trend continues and persists, then there is a chance that eventually GCCs will hire fewer people in India," he said.