First of all welcome to SPF
Well I've been on the both sides of outsourcing web design and most of the time the business was good both when I receive outsourced projects from other companies or when I outsource to some web agencies.
I would say a contract is a must with the client and with the company in India you are outsourcing to! Same for a 50-60% of upfront payment! 20-30% when the site is ready and the rest when the site is hosted on the final servers.
As for driving business:
You need to have many assets like: a good, modern and well designed website, Professional stationery (Business cards especially), good SEO implementation, Social networks presence, Offline marketing strategy and presence, offline ads (an ad on Yellow Pages is a good start), a development strategy, a market/niche targeting strategy etc....
As I said in some other thread few days ago, you need to do a lot of planning, researching, goals settings, benchmarking, competition stalking... Your business has to be remarkable and must be seen as a recognizable brand with specialties. And everything in your business should be reflecting a trustworthy and professional feel. This ranges from your website and business card to how you answer your phone and shake hands.
You have to make some research and decide on an adequate pricing scheme....
Have you considered all these points?
Are you the only actual employee/employer?
May be giving more details will help you get a better feedback!
P.S.: Thread moved to a more adequate forum