With outsourcing, you get what you pay for. Most outsourcing programs are cost-cutting measures. Companies go to the cheapest vendor available and expect comparable results. And when that does not happen, they feel comfortable and safe in the fact that "Indian IT personnel are less competent".
When you have a large number of IT graduates, you can expect a lot more incompetent graduates as well. And that is exactly what you get when you go to "IT sweatshops". Successful outsourcing programs would be found amongst the companies that pay the best salaries and rely on the PPP differences to bring the cost advantage. If you can get a selection of the top 10% of the talent in the US for $200,000, I would assume you can get comparable talent (top 1% in India) for $120,000. But this is not a common way to go about outsourcing. Ask those that do and you would be surprised at what is possible.
The issue is not about racial or genetic advantages. It is a question of comparative advantages and available resources between the two countries.