Joe, sounds like you're getting good value from India. This is a great topic and you both have very good points. I have been in enterprise software for years (last 10 or so at the executive level) and have outsourced work to India for at least the last 10 years. My last software company had around 30% of all R&D coming from India and I agree with TJs comment that the "well designed specs" get great turnaround in India but the "just run with it" US philosophy is hard to implement in India.
However, India has very little of the US "entitlement" attitude and they are hard workers. Your local US guy probably has better things to do or feels your work isn't that important and sounds like firing him is the right thing.
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