Why is such Indian offshoring continuing to rise despite higher costs. One reason, of course, is that despite all the wage inflation, India remains a lot cheaper than the U.S. The total cost of employing a fulltime Indian engineer including wages and benefits, facilities, telecom, travel, and administrative support ranges from USD 35,000 to USD 55,000. The U.S. average is at least three times that. A lead engineer in India still averages just USD 30,000 a year in salary, while a raw recruit classified as an associate engineer draws a mere USD 4,440 a year. The growth of Indian engineering wages, meanwhile, is starting to slow, meaning the gap with the U.S. wont close anytime soon.

But a bigger reason, is that the growing quality and experience of Indias huge technical workforce is offsetting escalating wages. Some of the estimated 250,000 Indian engineers working on global R andD, especially those who have been employed by big Indian softwareservices providers including Infosys INFY, Tata Consulting Services, and Wipro WIT, now have 10 years of experience working for international corporations. Countless others have received heavy training by their Indian employers. The reason to go to India no longer is just about cost, . Its about the quality of talent.

Thats a big reason Bangalore remains by far the most important R andD base. Of the citys 80,500 engineers working in foreignowned R andD centers, according to Zinnovs statistics, about twothirds have four to seven years of experience. Onethird have seven to 15 years, enough to qualify as a lead architect for many products. No other city in India comes close.

An influx of returnees from the U.S., Britain, and Australia, many boasting years of managerial and R andD experience at Western corporations, is supplementing Indias technical workforce.