It's probably the most cost effective for prototypes and "ship-and-forget" systems. Projects that require frequent maintenance or specific domain knowledge are bad candidates. Our company outsources mostly frontend and testing work to these offshore companies, and keeps business-requirements-adjacent work like system design/ops/backend for our own engineers.

Oh yeah my American friend was doing the job of communicating between the developers in India and Japan. He hated that job lol 😄

well cheap labour but then sometimes the developers from other countries are overworked and paid less

In Europe off-shore development is used mostly for "boilerplate" tasks such as testing exc. I'm not a fan of this approach and hope that with AI all those tasks can be performed at cost 0 😂