[ganeshkrishnan]

This. Outsourcing to India had slowed down in the last few years because wages in India shot up and it didn't make sense to outsource.

See: http://www.forbes.com/2008/02/29/mitra-india-outsourcing-tec...

The wages for IT workers rose insanely in India. In places like Salt Lake (where IBM, CTS and other bigwigs are established) they drove the real estate prices by more than 10x in few years.

The decline started few years back when the cost to outsource was nearly equal to paying an H1b person or hiring a local.

Most tech companies including Apple & Google hardly pay any tax, would you really expect them to pay artificial rates for labor?