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HOBART, March 1 AAP

March 01 2013, 1:57PM

A loss for the Indian city of Mumbai is Tasmania's gain, with 750 Vodafone call centre jobs to be relocated to the state.

Prime Minister Julia Gillard has announced $4 million of federal government money has secured the jobs boost for Tasmania, which has Australia's highest unemployment rate.

"These jobs will come out of Mumbai and here to Tasmania to create opportunities in this economy for Tasmanians," Ms Gillard told reporters in Hobart.

The Tasmanian government will kick in $850,000 to support the move, which the two governments say will inject $135 million into the island state's struggling economy.

Vodafone Hutchison will create up to 70 jobs a month over the next year, more than doubling the 680 current employees at its Kingston call centre in Hobart's southern suburbs.

"We have a long-standing commitment to Tasmania and we are proud to be strengthening our ties to this community," Vodafone chief executive Bill Morrow said in a government statement.

Ms Gillard said Vodafone had reasoned that Australian customers preferred to talk to a local service officer.

"Australians do want to be talking to someone who recognises their problems and issues, someone in Australia who can help them through their problems," she said.

"Vodafone obviously recognise that it wasn't the right service for its customers to have these jobs offshore."

She stopped short of saying the company had guaranteed the jobs would be long term.

But she said it had cost Vodafone more than the $4 million subsidy to relocate the operation.

"Vodafone is doing this because it fits with its company strategy to get its service offer right."

Tasmanian Labor Premier Lara Giddings said it was one of the biggest jobs announcements in the state's history.

By David Beniuk