Indians are willing to work under these conditions => willing or don't (think they) have much choice? And i'm sure rows of long, room wide desks without any separation between 1m workspaces with touching chairs and cameras pointing at you to keep you in your chair is not normal/allowed in the US? It certainly is not over here. I see quite a lot wrong with it. It keeps the prices low, sure. I didn't say the companies hiring them are happy though; I said they keep hiring them because it seems like a good idea and you have this team doing work, you can show the hours they spent, you can show what they did etc to your boss. It's kind of 'secure' compared to, let's say, Elance, where a really good developer(team) suddenly disappears to turn up a few months later with 'sorry, had some personal/company/financial/cosmic radiation issues' leaving you to explain why you hired this loose cannon.

Quality wise I have not seen anything coming from these shops, however that might be OK for departmental (read CRUD; the type MS Access was made for) LoB applications, mobile apps and internal sites.

Edit: stand corrected, I did say happy.