Here's the article... http://www.alwayson-network.com/comments.php?id=15024_0_38_0_C. It's by a Microsoft employee, but talks generally about whats good/bad about the Indian market. He covers pretty much the entire spectrum. Specifically, I thought this statement holds very true...
"It's also interesting to note that many Indians from the Valley are returning to India to set up their startup companies as well as to leverage the engineering/labor-cost advantages. While many startups we talked with have big ideas, they will need coaching to pitch ideas for funding and must be willing to accept possible failure, a normal part of the entrepreneurial culture.".
I've been following a few blogs by Indians who worked in software companies in the US and have gone back to start companies (startups) of their own. These are proper software companies, products based not services/bpo companies, targeting the Indian market. I feel this is an important trend. The backbone of the Indian IT industry is services, but it probably won't be able to sustain the growth in the years to come especially as salaries increase.
But at the same time, there are challenges. You have to think differently from if you were starting a co in the US because the market is so different. Broadband penetration is not high, payment procedures are different... credit card usage is not that common etc... But the guys who go back are smart and seem to take all this into account. Another thing is that the mobile market is booming and growing way faster than pc/broadband. So what about targeting mobile devices? That would be a huge market to target right off. I'm sure the big players like google, yahoo are already planning things, but there maybe opportunities to start some small super specific services?? What dyou think?