Sure, Indian programmers are cheaper, but when it takes 10 to 20 "programmers" to equal one of our guys here, the payoff just isn't there. Overall, I haven't been impressed with offshoring.
On a personal level, if I call a company for something and get routed to India, I'm a hell of a lot less likely to continue to do business with them.
It varies by individual.
If you're outsourcing by collaboration, then you also have to take into the time zone differences. Most business people cannot deal with that. Email is the killer app in that case, not Skype, IRC, WebEx, etc. that requires synchronization at both ends.
I don't particularly want to assist in outsourcing, so I'll stop here. My only intent was to explain what is going on.
it depends on who you outsource to and whether it’s outsourcing or offshoring. If you have your own firm set up in India then you pay for the best guys. If you outsource for lower bucks, you get code monkeys