Today, an Indian programmer cost 1/5 the wage of a US programmer of equivalent experience. Running your development center thousands of miles away imposes an extra overhead.
As the economy in India rises, so will the wages. Eventually, in 10 or 20 years, it won't be nearly as economical to off-shore jobs there.
On the other hand, if the trend continues, then the US current account deficit will balloon even more. Coupled with the budget deficit, this is going to drive the US dollar down even further, which increases the cost of overseas labor. Moreover, the Indian rupi is very devalued right now(went from 15:1 to 45:1 over the last decade)
There is an artificial situation right now that makes off-shoring very compelling to India, but one of any number of factors could put a stop to that gravy train quickly. Just like the Chinese did with manufacturing, I am willing to bet that the Indian government will do anything they can to prevent the gravy train from stopping.
In the end however, there is nothing to prevent any country with a highly educated workforce from competiting in IT with any other. It's *information*, so you need very little capital to startup. The biggest expense is good people.
The US cannot maintain an indefinite lead in IT because of the nature of how easy it is to copy and distribute information. The only real recourse is to keep researching new tech, be the first mover, and grab the market quickly, make your money, and move on to the next thing when the Indians catch up. The US has the one advantage right now that matters in tech: lots of money to burn on research.
Future laborers should expect to switch careers frequently. I've already started doing some biotech, since I expect the next big boom to be at the intersection of computer science and molecular mechanics/biotech/nanotech.
