Significantly, the advantage of lower cost in India would not be the guiding force behind such a shift, said Mike Parker, vice-president (South East, US), Aspire Systems, a Chennai-based OPD firm, said.

"In the US, outsourced product development is still fairly new. But companies will soon realise that the execution of a wonderful idea (on a new software) can be left to professionals in India," he said.

Outsourcing the product development to dedicated firms in India will help the US firms to concentrate more on brand-building and marketing of their products.

"By outsourcing products in India, companies can do it quicker and enter the market quicker. This means earlier-than-expected revenues," he said.

Though, the US firms also benefit from cost advantage, this may not last for long. "Cost arbitrage may not last forever. The wage difference (for software engineers) in India and the US are becoming narrower," Parker said.

Aspire Systems, which currently has about 22 US-based product companies as its clients, is advising its customers in the US to consider product development as an "auxiliary activity and not as their core competence."