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What you are not getting is that while outsourcing does mean cheap labour for Europe and US, it is not necessarily cheap for India(you mentioned keeping in-house). What you think is cheap are standard wages in India. It is cost cutting for US companies but not for Indian companies.

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No, I do get that. Perhaps I wasn't clear.

I was trying to point out that these same pool of people (low-paid workers in India and/or China) are necessary to the economies of all developed economies. And so it's not really fair to say India isn't a developed economy simply because it contains this pool of people.

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