The National Association of Software and Service Companies (Nasscom) reported that bad infrastructure, increasing labor costs and a decreasing talent pool might halt India's IT outsourcing industry.

Nasscom president, Kiran Karnik said, "We need massive investments to boost physical infrastructure for the IT industry. He explained that infrastructure problems include lack of accessible international airports, heavy traffic in main cities, and slow construction of roads. "Inadequacies like these does impact companies' bottom lines and act as roadblocks in the way of achieving higher growth rates," he said.

The industry is expected to grow by 25-30 percent annually over the next few years. Heinrich Pierer, Siemens supervisory chairman said, "We see enormous growth potential here in the coming years and a golden opportunity for global players like Siemens to tap this outstanding talent." Siemens has decided to invest $500 million on its Indian operations in the next few years to boost growth.

But as global companies like Siemens, HSBC, American Express and British airways offshore more and more jobs to India, pressure on the country's outsourcing industry continues to increase.