Until a couple of years ago, I worked for a major US IT firm, in Storage, and went to Bangalore to train new 2nd-level support guys on our mid-range products. The guys themselves were generally OK, since they weren't new to the industry, though there were some odd gaps in basic storage knowledge, such as SCSI protocols. Not something you'd expect to find in a person who'd allegedly done 2nd level support at another company, one that specialized in storage!
In general, though, I wasn't training new graduates from the likes of IIIT-B, but I met a few and had discussions with their managers. What I learned was that these young people were under immense pressure to succeed in IT, with the hopes and expectations of whole extended families riding on their backs. IT is the ticket out of the slums, and families make enormous sacrifices to get their kids in to the industry in the first place. In college, I was told, there's also massive pressure to score high marks, and the process is more biased towards rote learning and cramming for exams. Not totally, of course - that would be impossible - but the point is that, like the Indian education system in general, it's tighter and more authoritarian in terms of curriculum, and the schools themselves were under govt. pressure to deliver high numbers of graduates.
I hate to say this, but I met a few "graduates" who were simply not "graduate material", in terms of basic intelligence, curiosity, enthusiasm, or ability to absorb new concepts. Other graduates I met have great careers ahead of them, but I came away with the impression that "graduate" over there is a bit (again, not totally!) like "MCSE" in other countries: a statement of the exams you have passed, not a wider measure of your ability to function in a complex, ever-changing IT world. The problem with "cramming" is that while it might get you through an exam, the knowledge is not integrated and retained as well as it should be. I'm seeing this myself, now that I'm getting to go to university as a mature student (Engineering), where some subjects would IMHO be better assessed by e.g. thesis, not exam.