Indians are more focused on making the quick buck, rather than working on a product for the long haul, and actually developing something new, unique and innovative. Unless this mentality changes, there will not be a market for YC type shops in India.
Disclaimer: Born and raised in Calcutta, but in the valley now.
But then there's also an empowerment issue - or so I have come to believe - which is that non-Western companies are loathe to empower their lower-ranking employees to make decisions of any kind.
If I get on the phone to call a bank's customer service centre, and I get put through to an outsource call centre in Dublin or Glasgow I am a HAPPY man. I know the person on the other end of the phone has been given buttons they can press to make my life better. I know that if I explain a situation well enough, and am persuasive enough, that that person probably DOES have the power to change things.
If I ring up my airline to beg for a status upgrade because I got 290 points instead of 300 last year, and I am put through to someone in a Western country, I know that they will be empowered to say "OK", and to help me out.
If I ring up anywhere, and am put through to India, or Egypt, or Qatar, I know I'm fucked. I know that the person on the other end of the phone is not allowed to make decisions. That they have just a script. That they have not been trusted with the authority to help me out...
Almost all Chinese web startups which are making huge IPO exits these days are direct ripoffs of successful American web companies.