Jittr

If we outsource our Software Development , we can save considerable labor costs. For each USA based employee we can have 4 or 5 based on current ratios of India development resources.  True, if the disparity between where the resources are currently located and where they will be outsourced to is large, you will save some personnel costs but is that the sole determinant whether it is a good idea or not?
Dispersing technology development/support (or operations) throughout the world has benefits besides cost and based on labor rate differentials. If you have a large enough inventory of sites to support that operate 24/7, having a team of System Administrators that overlap various timezones should improve the responsiveness when things inevitably go wrong. Also allows for system maintenance during the slow hours in whatever market the particular site has it’s lull.  Also, you can smooth out the demand and supply imbalances  in actual engineering resources that make acquiring engineering resources problematic regardless of what the pay scale is in certain markets.
On the other hand, if you are working in a domain that is subject to large amounts of uncertainty and market pressures in leap frogging features, what does a lower labor rate coupled with the latency inherent in time differences and maintaining context get you except 2nd , 3rd or further down in timely meeting the market need?
I have worked in situations where design is in the Eastern Time Zone and Web development on India time. A change in design would easily take 48 hour turnaround just to get the correct understanding of what the feature represented and how it fit into the rest of the product/design flow before anything could possibly be engineered.  Given that Frontend Web development is relatively low technology this minimum latency is dysfunctional and has an attendant cost in frustration on the part of the involved product team including executive management as well as missed opportunities in the marketplace.

The aforementioned should not be cast as a criticism of engineering in India as those engineering teams are  thrust into a position where success is not achievable.