India will continue to be a leader in the outsourcing market

India will continue to lead the outsourcing market, but will face more and more competition from Russia and China, UK research firm Gartner said.

Its study found that newcomers to the market such as Malaysia, Poland, the Baltic states and the Czech Republic, would win a bigger share of the market.

Countries will also seek to offer different specialist services.

"Companies in the Philippines, for example, may decided to concentrate on call centres and then that will inevitably cause people to transfer activity over," Ian Marriott from Gartner told BBC News Online.

"Mauritius might get into call centres to utilise its French language skills. North African countries might also offer their language skills to French companies.

"Russia may increasingly get into high-end applications utilising the scientists they have."

Backlash warning

In Western Europe, British firms are most likely to outsource work, followed by Germany, Switzerland and Austria, and then France and Italy.

Even by next year, 30% of leading European countries will outsource some of their operations.

Bangalore's has developed its own 'Silicon Valley'

But Mr Marriott said that in the short-term the trend would probably produce a backlash against the shifting of so many jobs overseas - as well as cases of outsourcing projects failing.

"In certain communities, if large numbers of people are affected, then outsourcing might have the same impact as the demise of the shipbuilding and steel industries," he said.

"It could become an election issue."

The volume of work outsourced to India has increased by more than 50% in the last year, according to Nasscom, the association of Indian software companies.

Senate vote

This has sparked campaigns by British trade unions and some American politicians.

The US Senate this month backed a measure to restrict the exporting of jobs to developing countries such as India.

Wages in Indian call centres are about 10% of UK rates

The move, which is not yet law, was passed with a vote of 70 to 26, and would forbid the outsourcing of work on contracts paid for with federal funds.

The Democrats argue that taxpayers' money should not be used to send jobs overseas.

In Britain, unions say 28 firms have outsourced more than 50,000 jobs serving UK customers to India over the past two years.

But politicians in the UK and the US have said outsourcing can benefit their economies.

Britain's Foreign Secretary Jack Straw said outsourcing is changing investment patterns and has actually created jobs in Britain.