Given that China and India are countries with 1.4B population, no surprise that one can find enough people to form exclusively Chinese (or Indian) teams. Another factor is that people from other backgrounds do not want to join such teams even if the hiring manager makes them an offer. When I was at a FAANG, my team composition slowly drifted towards only Chinese and Indian, as people from other backgrounds left in 6-12 months after an Indian manager came in.

Around 2012, I attended the very first coding bootcamp in SF. We had a demo day and a (white) recruiter from a local start-up came and literally only talked to every one of the white students (in a class that was half white) but none of the non-white students. Not a single one. When walking by a table with a non-white student, he would just said "excuse me" and squeezed pass. I looked up the company's website later and it was a 50-ish person start-up that was all white males, except 1 Asian girl who was a PM.

Now, I'm sure the people at this start-up would probably not think of themselves as "racist" (especially in liberal SF) even though this recruiter behaved in a racially exclusive way. But it really goes to show how subconscious these instincts are. This is why it's unfair to single out Indians/Chinese in this case as the only ones who have an in-group bias; every group has an in-group bias if we're really being honest here.

Having said that, the best tech teams I've worked in have been very diverse. They were high performant, but also had a great deal of trust in each other. I think it's because every one knows every one else is a high performer and trust each other's judgment. Nobody is just here because they "just gel with the vibes" and playing group-politics, which sometimes falls on racial lines.