NHS patient record services in the East Midlands are being outsourced, with the loss of about 90 jobs.
Nine Primary Care Trusts have agreed a contract with NHS SBS - a partnership of the Department of Health and IT firm Steria - with some work going to India.
Health officials said the move will save up to £9m over six years and will not impact on patient care.
But unions said staff had been "sold out" and having some tasks sent to India risked vital information.
The move will see payment processing, cervical and breast cancer screening correspondence, medical records and patient registration done by the new firm.
NHS staff have been told the current workforce of about 150 will be reduced to 65, based at offices in Leicester and Derby .
Officials insisted sensitive information would not be sent abroad.
Andrew Booth, of NHS Derby City, said: "There are some services which are being provided from India but the majority of services will be located in this country.
"No clinical data will be in India, it is all based in servers here.
"From an information governance side, for accessing data there, which I know has been a concern, actually the Indian operation has been independently validated as being as good as, if not better, than in this country."
But Scott Kingswood, from Unison, said: "There could be hiccups in transfer of information, data protection.
"But the crux of it, despite all that, is that the job still exists, the people who are currently doing those jobs are being told those jobs are no longer theirs and having it taken away from them.
"In my book that is privatisation of the NHS and staff who have spent many years working for the NHS are feeling let down and sold out."
The reorganisation is due to be completed by the summer of 2011.
The nine Primary Care Trusts involved are NHS Bassetlaw, NHS Derby City, NHS Derbyshire County, NHS Leicester City, NHS Leicestershire County and Rutland, NHS Lincolnshire, NHS Northamptonshire, NHS Nottingham City and NHS Nottinghamshire County.