"A lot of businesses in Mexico are temporarily shut down, and IT services is a 24-7 business," says Gartner Research Vice President Frances Karamouzis. "The country also has travel restrictions in place now, which was one of the primary attractions around doing work in Mexico -- the ease of travel. If you can't travel there, that ruins business.

"College campuses campaign for students not to vacation there and businesses advise employees to limit travel to Mexico," she says. "Now the flu outbreak. None of this bodes well for Mexico as an offshore location."

This is happening even as Indian vendors are and establishing facilities elsewhere, such as China, the Philippines and Eastern Europe. These vendors also might consider Argentina or Vietnam before locating in Mexico now, Karamouzis says.

"Labor rates in Vietnam are about one-third of those in India," she says.