So where did you get the four Indians for one America or the Two Europeans for the price of one American if they're getting paid the same.
Not having a dig at you mate.. is that something you heard as well ("As I heard it")
From the justifications that were floating around ten to fifteen years ago when they pushing the whole
"let's outsource our design centres to India, faaahhhzans of CS graduates, work for naaaahfink, what could go wrong?" line out of Corporate HQ. The downside turned out to be rather impressive staff turnover; lots of ambitious young engineers, lots of jobs in all these Indian Design Centres, and an expectation that you need to move jobs in order to get promoted.
Every time we lost a software team member, the slot would be replaced at our Indian site. Basically, the confirmation was coming from senior corporate types on site visits, who kept saying
"Yes, we pay you more than them - but you're seen as more productive". The Scottish site is still open, and growing.
If you consider the average new graduate in India to be pretty much equivalent to the average new graduate in Europe, that turnover rate will still cause you problems. It means you need to spend more time on process, forcing people to write stuff down, because otherwise the knowledge goes out the door with them. With lower average levels of experience on the products, tasks take slightly longer on average, and output has slightly higher defect rates. Because your supervisors are less likely to have spent much time at this product's codeface, their ability to mentor young engineers is reduced. Because your system architects don't have quite as much experience of this system, opportunities to reuse parts of the design are missed - so it gets larger and clunkier. Your design teams essentially run on Befehlstaktik rather than Auftragstaktik - great if you're doing minor modifications to an existing product, not so good if you're building something new.
Staff turnover can screw you up, even if the two populations of engineers are just as good as each other.
I've worked at a UK firm that had a 30-40% annual turnover of design engineers in the depths of a recession; all of the problems I've described above, and it was
not a nice place to work. Talked a good fight, mind you, but the CEO was a weapons-grade moron. I managed to get out after a year and a bit, with a huge sigh of relief.
If you give people an enjoyable place to work, coherent leadership, a reasonable expectation of a career, and pay them slightly more (the "Golden Handcuffs" effect); they hang around for longer, and it pays back even in the short term. People might join a firm; they tend to leave a manager.
Think of it this way - is it more relaxing to serve in a unit where people have been around long enough that things aren't a drama? Or one where no-one has been there long, or really knows what's going on (and is a complete cake-and-arse party, as sundry DS have put it)?