The other day I got a telemarketing call. The person calling had an Indian accent. Aha, I thought, he's probably one of those outsourcing people and he's sitting in India right now. But is it really practical to outsource telemarketing if you factor in telecommunications costs? What's the lowest rate for long distance to India? There wasn't a satellite delay, so the call must go by undersea cable. I also once received a telemarketing call from New Zealand. In this case the caller was selling some sort of financial service for homeowners whose high profit margin might justify doing business this way.
In theory, this is true. In theory, any programmer is interchangable with any other programmer and a probject that will take one programmer 6 months will take 6 programmers only 1 month. In theory, a project's sponsor knows what they want and in theory the project's sponsor will deliver their requirements and not change them until the project is delivered. Reality doesn't always work that way because of human factors.
If a company can write a comprehensive specification for their project and if that specification remains unchanged throughout the development project and if the workers in India can produce results on schedule without direct supervision, then, yes, I think India could work just fine. But a substantial amount of communication and understanding is normally needed between the sponsors of a project and the developers, not only to develop the design specifications but to manage the sponsors' changing requirements and to make sure that the sponsor is getting what they want. This is why documentation, change control, communication, and expectation setting are such major parts of project management books. And a substantial amount of supervision is often needed to keep contractors on schedule.
If software development in the US were humming along with the same predictability and efficiency as an assembly line, I'd be more willing to believe that location doesn't matter. But the truth is that a lot of software development is a mess, a lot of projects are late or have failed, and a lot of project sponsors are not happy with what they get. And unless Indian programmers and project managers are significantly better than their US counterparts, moving the developers a half-a-world a way will only make matters worse.