A call centre opened by a UK retailer in India is to close and jobs returned to Britain.
Shop Direct, formerly known as GUS home shopping, opened a call centre in Bangalore in March 2002, causing the loss of 250 jobs in the UK.
But the company says that the centre, dealing with orders and customer inquiries, will close next month and the jobs will be moved back to its six call centres in the UK.
Shop Direct said that the level of customer service provided by the Indian centre was not up to standard.
The shopworkers' union Usdaw, which has 10,000 members working for the GUS group, welcomed the decision. A spokesman said: "This decision is proof that you can cut costs, but not necessarily cater properly for your customers.
"We will be using this news to tell companies they should be keeping their jobs over here."
Amicus, the union leading the campaign against offshoring, said that the decision would be the first of many. And it said that the move vindicated the argument that the threat of a consumer backlash, high staff turnover and problems with customer service skills mean the long term business case will out-weigh the short term search for labour cost savings.
Last year, Australian-owned Myers Credit Cards pulled out of its outsourcing contracts in India after a customer backlash over levels of service.
David Fleming, National Secretary of Amicus said: ďThe business argument against offshoring is gathering pace. This will be the first of many companies which will take a business decision in the interests of long term profitability and the UK economy."
Earlier this month a report from consultancy Contact Babel found that UK call centres answer 25 per cent more calls than their Indian counterparts and resolve 17 per cent more of these calls first time.
But business opinion on the issue is split. Last week, the Abbey National bank and Axa Insurance both announced plans to transfer customer service and back office staff to India. But rivals Legal & General, Nationwide, Alliance & Leicester and Royal Bank of Scotland have publicly stated that they will not offshore any of their UK-based operations to India.