As like many of my fellow readers I believe the inflation is going to hit the offshore R&D centers in India very hard at present and in the years to come. The focus for these centers should be in increase their productivity and most importantly nurturing "innovation". Which is again a big challenge, because, thought number of engineers is increasing multifold, the quality of education is diminishing at the same pace (unfortunately!!).
Yes defintely the operational costs are going up. The average salaries have gone up. People are returning back from all over the world.Soon its going to be like no matter whether you work in India or US, the salaries are comparitive.
The R&D I believe is still not the same R&D as done in american labs, more like advanced engineering or product enhancement. The experience level of a typical engineer being 5-6 years is too less to make cutting edge innovations done in US centers.
@Chaojiang modeling is abt experience unlike some kind of design work, where you could easily copy and reproduce , like what happens in China , I guess in a few years models from India will be world class. I commend IBM on the effort spent in India to train and develop modeling engineers.
My experience in IBM is that the models from India have much more problems than those from US team. Many Indian teams claim they can do a good job but final the quality is very bad.
I think the R&D in US has more advantages, because of good educated engineers/scientists in US.
One of the things that may go against India in the coming years is the very hogh rate of inflation . The rate of inflation is nulltyfying whatever salary raise one gets annually. The cost of living in metros has doubled in just 10 years. If we compare that with the exchange rate of dollar Vs Rupee ther is hardly any upward movement. So the margins of doing the jobs offshore by MNCs are reducing.
It still remains a lot cheaper to get the R&D, advanced engineering and design done in Indian centers. Since the overall standard of living and consequently the cost is far less in developing countries like India & China, Multi Nationals get a huge discount getting things done in these countries. And the rigorous education system and immense competition, driven partly due to the population, ensures that the brains on the job are amongst the best. Many of the semiconductor R&D centers in India, for instance have contributed to path breaking chip designs over the past few years.