A lot of what is mentioned in newspapers is political posturing and in the end does not really affect the expat rank and file. The 2009 date is a mandate to submit a plan to phase out expats, and just that. While it is true that expats will eventually be phased out, in my opinion I think we are a few years from that here in India. My best guess would be a slowing of expat hiring after 2012. The only way that might get accelerated is if there is an economic downturn or a sudden growth stagnation leading some airlines to fold. In that case the need will be proportionally limited. Given that some airlines have a 2500 hr requirement to command, it will take a new hire around 5 years to get to that mark based on averages. Bear in mind that that's just the minimum requirement. Once they get there they will have to have cleared all their exams and be assessed for upgrade. Not everyone with 2500 hrs will get their command at the first bench mark.
Actually I feel India is going to have trouble in recruiting pilots in the future because other countries have realized the need as well and have started to up the terms & conditions in order to attract and retain applicants. The major competitors to India will be China, Korea, and all the Gulf states. The age 65 rule in the USA being implemented is also causing a minor impact.
A big point that airlines must realize that when it comes to expat pilot who are on a contract--terms & conditions are the key along with quality of life.
If someone is on a contract on single status, for the most part they don't really care where they are--most hotels look the same!!
To some extent India is paying the price for not having invested in infrastructure which is evident for most anyone that has been here.
They are playing catch up, but as the growth is continuing it is getting even harder to do so. The ATC system and the airports will just not be able to handle all the growth that is underway. Perhaps, just perhaps this is why the Govt is attempting to regulate growth of private airlines.