American companies are starting to wonder if India should be their default outsourcing destination for global software development. Recent increases in salaries are causing engineers to quit and move on to more lucrative positions. And that’s if you can hire them to begin with.

And combined with the increased value of the rupee compared to the dollar, American companies are concerned that the cost savings will continue.

The growth of the Indian IT industry over the last several decades has been fantastic. But as the recent Gravity’s Pull article in the Economist magazine says “for all the talk of the world being flat, economic gravity still applies.”

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