U.S. Company Hiring a indepndent contractor in India?

We are a small software development company and we would like to hire a programmer who will work/live in India and work for us remotely. Can we hire that individual as an independent contractor? If so, we are responsible to pay any US taxes for that programmers services?

Your main concern should be: does the programmer fit the criteria of an employee or independent contractor?

Main criteria of an employee = do "you can control what will be done and how it will be done?"
If the answer is yes, than the individual is an employee. As my source indicates, the courts have ruled an employee as someone who does not have control over certain factors in the working relation: Work tasks, pay rate, and benefits as well as many more underlying factors in the relationship.

Key points: Employers are responsible for employees classified as such:
"* Withholding Federal income tax,
* Withholding and paying the employer social security and Medicare tax,
* Paying Federal unemployment tax (FUTA)
* Issuing Form W-2, Wage and Tax Statement, annually,
* Reporting wages on Form 941, Employer鈥檚 Quarterly Federal Tax Return.

For a worker who is considered an independent contractor, you may be responsible for issuing Form 1099-MISC, Miscellaneous Income, to report compensation paid."
Be Aware that the IRS does look at these relationships closily. Determine if the criteria of employee fits or not. You will have your answer for the first part of your question.

For the second part of your question regarding the working remotely in India, you have to consider US tax treaties. You may want to consult Publication 901 to find more information. Here you could have exemption of taxes or reduced taxes related. You may have file certain forms and if not filed timely fines are assessed.
Hope that helps. Good Luck!