The big problem are WITCH companies (of which "C" is for Cognizant usually) and those that, through osmosis or purposeful actions, copy their practices.
The contracting companies probably single-handed build and maintain lots of racist stereotypes against indians, because the level of service those companies offer is always unmitigated failure, even internally. I once accidentally stumbled into working on a contract through WiPro myself, and it was a horrific experience. The way I see it, the line workers that end up the target of ire and stereotypes are just victims of actions taken way above them.
The people who can, apparently avoid working for them, or use every opportunity to escape. Those who can't yet but have ambition for more, apparently use every opportunity to escape - whether it is by jumping ship on H1B, or otherwise. Those currently stuck are in no way encouraged to do a good job, and for obvious cost cutting you get people who were in no way prepared to do the job.
Occasionally a client will get angry enough and they will pull an actually skilled person to smooth the ruffled feathers, someone they usually trot for dog&pony show when winning the contract as example of who is supposed to work on it.
But the "important" people, upper management who decide to contract with WITCH, and the upper management of WITCH who run such strategy, they all profit. The managers and/or C-level who outsource sight-unseen with no quality enforcement disappear with their rewards before institutional inertia stops papering over their decisions. The WITCH companies pocket huge amounts of money while paying pittance to line workers and providing worse than zero service.