Rises in the wages paid to Indian IT workers could lead to the country pricing itself out of the offshore-outsourcing market. Eastern Europe may also become more attractive as an offshoring centre. Last September, a research report estimated that a recent graduate of a specialist university in Romania could be hired for $6,500 (£3,572) a year in software development. An additional possibility is Russia, another country that produces more bachelor's degrees in engineering than the United States.

"There is great competition for cost, and there is a view that India is getting more expensive," said Pete Foster, a research director at Pierre Audoin Consultants, which released the report. "Europe represents a good opportunity and a new area to find resources -- but it is virtually ignored by the UK."

Even if companies turn to other countries for outsourcing work, however, India's technology industry would by no means be in dire straits. Executives and analysts on both sides of the Pacific agree that India's offshoring business is far more advanced than those of other countries and has unique benefits ranging from ...

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