Depends really. Despite the stuff ppl say about Indian programmers, its just a myth. Just like from anywhere else, there's the good ones, ,and there's the bad ones.

In general, Indian programmers can be cheaper, but do keep in mind that cheaper does not mean cheap either. Sure its cheaper than bringing in somebody from the US, but that does not mean that u can get a good one for peanuts.

It also very much depends on the nature of the work to be done as well. For example, one of my clients had paid AUD2k per day for a Oracle specialist to troubleshoot some data migration issues that they're having, but they still consider it money well spent. That AUD 14k (for 7 days work) is still far cheaper than the other proposed solutions, of which the fastest will still take up to 2 months to resolve the issue.

You are correct. Our company recruited a Indian programmer for the specific skill thru the consultancy.The agent charged our company Rm7000 per month and my colleague was getting only Rm3000.Still the guy was not good enough to show his skills so fired la.
The same agent supply a Indian programmer to the client with the same amount. but he is a genius.(sometime he helps my clear my technical doubts without charge).simply "BODY SHOPPING".

RM7k per month is actually a pretty common charge for those 'body shops' as they're called, even when they're sending in a local person to do the job.