International Business Opportunities

US officials have written to nine Indian firms based in the US, asking them to account for their workforce, and explain how the visas were granted.
The US authorities are concerned that the Indian companies are trying to avoid hiring skilled American workers.

US authorities grant a total of 65,000 temporary working visas every year. (see H-1B Visa Now Just a Critical Tool for Indian Outsourcing Vendors)

However, in recent months, the US has become concerned that many companies are bringing over lower-paid Indian workers at the expense of the more expensive Americans.
In the past few years, the US has been urging India to open up its own economy to American businesses.
Many US companies have come to India, lured by the fortunes of firms that have flourished because of the strength of the Indian economy.
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source: BBC)

According to Gartner’s IT sourcing group, Indian service providers set their sights on European countries as key areas for growth. […]

To avoid losing out to this new breed of competition, Gartner says that continental European service providers should revamp their strategies to encompass global delivery and service industrialisation. […]

Some issues must be resolved before Indian companies can truly compete on a level playing field: “These Indian offshore providers are recruiting staff in the European markets they sell into; not just sales staff, but consultants, project managers, engagement managers and, in some cases, personnel to staff their new near shore delivery centres” said Ian Marriott, vice president of research for Gartner’s IT sourcing group.
(Source)

“China accounted for more than 60 percent of Japan’s outsourced software trade in 2006 and has become the country’s biggest software outsourcing base,” said Mine Shentaro, of the Japan External Trade Organization based in Dalian, China’s Liaoning Province. […] “More than 60 percent of China’s software trade is Japan-oriented,” said Jin Guowei, deputy director of Dalian Information Technology Bureau. […]

According to a government plan for the development of software and information services, China aims to generate 168 billion U.S. dollars from the software sector and export 12.5 billion U.S. dollars worth of software services in 2010.

Noshiro Yasuo, president of Fujitsu System Engineeering Co., Ltd in northwest China’s Xi’an, said:
“While European and American companies are choosing India as an outsourcing base, Japanese firms prefer China because we are close neighbors and have similar cultural backgrounds.“

The H-1B visa law, championed as a way to attract the world’s best and brightest to America to study and work, allows skilled, specialized foreigners to work in America for up to six years and then pursue permanent residency.
The International Herald Tribune points out how the H-1B visa is now being put to a starkly different use.

The newspapers says:
“It is now a critical tool for Indian outsourcing vendors to gain expertise and win contracts from Western companies to transfer critical operations to places like Bangalore.” […]

According to a tabulation of U.S. Labor Department statistics, eight of the 10 largest H-1B applicants last year were outsourcing firms with major operations in India.

The newspapers explains:

“To deliver the solutions from a remote environment, Indian outsourcing vendors need a certain number of people being with a customer, understanding his needs and collecting the requirements.[…] They simlpy need a link between the people who are doing coding in India and the client”.
Indian outsourcing vendor Infosys had 6,800 U.S. employees on H-1Bs as of last September. In 1998, the figure was 231.

Growing IT services demands from USA and Europe along with shortage of skilled employees, are forcing Indian IT firms to look for outsourcing to China.

“Reoutsourcing” to China, seems a new strategy for leading Indian IT companies, which also try a way to face increasing salaries of high cost workers.
In China, on an average IT-engineer with little bit of experience can be paid 500$ salary per month as compared to over $700 in India.

However, what can be outsourced to China is related to Information Technology services, not BPO segment which requires knowledge of English language.
Poor English skills of its employees, limit China also to become a potential competitor of India in the offshore outsourcing market.

India has currently about 80 % of IT services being outsourced offshore, as reported from Gartner Group,research company. ( source )