Most US companies that hire an Indian software partner are not chasing a lower hourly figure. They are short of senior engineering capacity, they cannot wait six months to hire it, and they want a team that can start next month. The risk is not the geography. It is buying from a firm that cannot be held accountable. These are the checks that separate a real partner from a reseller.
Verify the company before the proposal
- Ask for the CIN (company registration number) and look it up on the Ministry of Corporate Affairs portal. It is public and free.
- Ask for the GSTIN and verify it on the GST portal, and confirm the registered address matches the office in the proposal.
- Ask who will actually do the work, how many are employees and how many are contractors, and whether any work is subcontracted onward.
- Ask for two references you can call, ideally in your industry, and for live products they built, not screenshots.
Choose the engagement model deliberately
A fixed-scope, fixed-price build suits a clearly defined product: you approve a written scope, the vendor carries the delivery risk, and changes are priced separately. A dedicated team suits a long-running product where requirements keep moving, and you carry the direction risk instead. Neither is better. The mistake is using a dedicated-team model for a defined project, which turns an unknown scope into an open-ended bill.
Contract points that matter
- Written assignment of intellectual property to you on payment, covering source code, designs and documentation.
- A mutual NDA signed before anything sensitive is shared.
- Governing law and dispute resolution stated explicitly, including where any arbitration would sit.
- Milestone-based payment tied to written acceptance criteria, rather than large upfront payments.
- Source code, hosting, domain and analytics accounts registered in your company name, not the vendor.
Payment and tax paperwork
Exported software services are zero-rated under Indian GST, so a compliant export invoice carries no Indian GST. Payment is normally by international wire. US companies paying a foreign vendor are commonly asked to collect a Form W-8BEN-E from the vendor, and services performed outside the US are generally treated as foreign-source. Confirm your own treatment with your tax adviser before the first payment.
Making the time difference work
India is 9.5 to 10.5 hours ahead of US Eastern time. Real overlap is a few hours at the start of your day, which is the end of ours. That is enough if you insist on three things: a named project manager with a committed response window, a written update after every milestone, and a standing weekly call at a fixed time. Without them, the gap turns every question into a 24-hour round trip.
Red flags
- A detailed quote produced within an hour for a complex brief
- Reluctance to name the people who will build your product
- No written scope, only a proposal deck
- A request for a large payment before any scoping is done
- Hosting and domain registered to the vendor