I don't care who you are. If your sleep cycle is off by a half-day from the busy users that you need to get requirements and feedback from, you are going to take longer and take more of that user's time to finish the job than someone halfway competent who is local.
Whether this dynamic is a key arbitrator of costs depends on what you're task is. But a lot of companies that try to save costs by exporting IT work overseas only succeed in digging themselves into a money and development pit.
Of course this is hardly the only money and develpment pit people dig for themselves. Oddly enough, though, many of the others are also related to communication overhead. See The Mythical Man-Month for a discussion of some of them...
Cheers,
Ben