In fact, there would be not be such an extensive Indian software industry if not for the salary arbitrage.

No, this isn't true. It might have been true in a pre-Internet world. But in a more connected world, companies will seek talent, skill wherever they can find. Sure, we wouldn't have seen TCS rise like it did in the 80s and 90s, but it's incorrect to attribute the entire growth of the Indian (or any other software industry) to cost arbitration.