Standardized testing is the reason why India – despite its billion strong population and heavy cultural emphasis on science and engineering – is unable to produce a single ounce of innovation. Students are only taught rote memorization from primary school onwards. They spend their formative years in before-school and after-school coaching doing more of the same, all to crack that single test which will determine their future (and a large number are driven to suicide because of it). No curiosity, no outside interests, no social skills, no independent thought. All of these are discouraged in favor of memorizing equations.
Institutions like Harvard, Yale, MIT, Stanford produce leaders and entrepreneurs. India's top engineering colleges (IITs) are meanwhile ranked nowhere globally, and its top graduates dream of getting a cushy job at Google, nothing more.
There are a lot of problems with American universities, but the lack of entrance exams is a feature, not a bug.