Everybody loves a doomsday scenario and articles that are apocalyptic. Heck, politicians routinely use this strategy to win elections.
The reality is unsexy and mundane middle-ground. The Indian IT industry is not going to disappear overnight, nor is the US industry is not going collapse overnight because of China and India. Also, everyone loves the stereotype stories of Indian offshoring horror stories but again, the answer is a lot more complicated.
The unfortunate reality is that a lot of the headcount that was offshored and outsourced has to do with work that is relatively lower skilled, and involved repetitive activites and "following processes". It therefore mattered little if the work was done in one country or another, except offshoring the work to some countries also meant significant cost savings and headcount reduction.
However, that is not all to it. Work that is off-shored is often a complex package of business processes, software tools, infrastructure, support etc. While a lot of the work is indeed process based, a critical part of it also requires very high levels of solution and software architecture skills, deep business process knowledge, deep domain knowledge etc. Indian companies did not merely win projects because they could tout "low cost" competitive advantages, but also because they could staff enough people with the deep levels of expertise and experience required to make these projects a success. It is a numbers game. If there are hundreds of thousands of mediocre or even sub-standard workers, there are also tens of thousands of employees who are top notch and highly skilled.
And these are exactly the nuances that get lost when the pitchforks come out about the poor quality of offshoring. Projects and contracts of a certain scale require certain headcount numbers and contracting companies to prove that they can handle work at this scale. This kind of capability and reputation is very hard earned and often takes decades. It doesn't just disappear overnight. For large consulting companies, this reputation and scale capability is their identity, their "moat".
And if you're going to get into racial or ethnic stereotypes, then it is to be noted that the same Indians who are frustratingly incompetent in offshored contracts are also the ones that are thought leaders and actual leaders in a lot of the flagship high-tech companies and software companies. So like i said, it is a numbers game.