This is a case of corruption, which is endemic in Indian culture. There are countless examples of mid-high level Indian Managers convincing management to move work to bodyshops from which they either receive kickbacks, are started by close friends so they get to profit also, or use as a side-channel to push their own people (relatives, immigrants from back home) into the organization.

It's shockingly widespread and because the management structures at many tech and IT companies are Indian, no-one bats an eyelid. This is one example of foreign cultures actually degrading American work culture. There are a few others in this category.