Tens of thousands of test papers sat through City & Guilds are being scanned in and sent to an educational company based in Bangalore. The agreement involves "functional skills" exams in reading, maths and ICT sat by children and adults, which are designed to assess the practical application of core skills in the workplace and life in general.
Other exam boards have previously outsourced data entry to firms based overseas, but experts suggested this was the first deal of its kind involving marking. City & Guilds affirmed that the move involved a "significant" upfront investment by the organisation, although it is hoped it will eventually "result in cost savings" that will be passed on to customers.
The deal was struck because functional skills exams are taken at any time of the year and the board needed to access a large team of established markers who could quickly turn papers around in masses, the organisation said.
It also affirmed that rigorous training and quality checks have been put in place to maintain standards, with senior examiners double-checking a set proportion of papers. But, the move has been criticised by education experts as a risky venture that could lead to mistakes being made.
Prof Alan Smithers, director of the Centre for Education and Employment Research at Buckingham University, said: "It is very concerning because exams are not an exact form of measurement and rely to some extent or another on understanding and judgment."
"I have no doubt about the qualifications of the Indian people involved, but what experience do they have of the courses that are being delivered in this country?", he added.
Functional skills exams are taken in schools, colleges and work-based training centres. They can be worth the same as a GCSE and were developed in response to employers' concerns over the practical application of basic skills.
In 2005, it emerged that the Assessment and Qualifications Alliance - Britain's biggest exam board - was using an Indian company as part of the exams process. But, a spokeswoman confirmed last week that it only involved data entry, insisting all marking was carried out in the UK.