I looked at some of the applicants that we've had come in. There are many for India, and we've definitely had many that were under-qualified compared to their paper. However, a good mix of my current co-workers are also (originally, immigrated and now PR) from India, and they're generally as good or better than their paper credentials.
Why? Because my bosses actually have decent interviewing skills, and picked candidates with actual skills in something other than B.S., rather than just looking for somebody cheap. From what I've seen, a lot places where the poor workers are endemic seems to be:
a) The hiring process sucks and/or is done almost entirely through 3rd-party recruiting companies who are basically contractor-mills. In some cases the hiring manager is good, but never sees the good/skilled candidates because they lack the correct buzzwords on their resume
b) The pay is sub-par, and all you're getting is people who are desperate or are unqualified. For the former, once they've settled they'll move on. For the latter, well you've seen what happens.
If we dumped a bunch of the 3rd-party recruiting parasites, that might be a good start at improving things. I actually got my job through a recruiter once: a 3mo contract which I said I'd only take if there was a chance for permanence, and then they tried to tack on conditions that I couldn't *TAKE* a permanent permission without their permission (paying a placement fee). I argued with them until they removed that clause, but apparently they put it on the employer instead (cannot hire without paying a recruiting fee). Thankfully my employer liked me enough to pony up. Afterwards, the same recruiter called me about 6mo later with "hey, are you happy at $X, we've got a position at $Y which would be great for you!"