One of the main advantages of outsourcing to India is the low labor costs. Typically, rates of Indian software houses are about seven times lower than that of the US or Western Europe.

India is situated in Asia. Indian offshore software development companies normally compensate for the time difference with their European and even American clients by adjusting their working schedules so as to have maximum overlapping hours for mutual contact.

The Indian government supports the companies, operating in the sphere of IT. The Government of India issued the decrees through Nasscom, which created preferential economic conditions for the association of companies operating in the field of IT applications production and export. This is the creation of an offshore-programming zone. This creates a legislative basis for offshore software development. Preferential taxation considerably reduces costs of software development for Indian companies.