Are these graduates? Are they real developers or people that know html, css and photoshop thinking their front end devs? Have they spent their lives in big companies that are still in xml land?
That's all the excuses I can think of. Some of them may be honest, just ignorant.
They generally don't have a clue, or sometimes have had job titles like "Software Engineer" but all they did was basic GUI testing, which is also the case at my company.
Is it possible you aren't offering a wage that attracts talent? You seem to be implying that Indian labor is smarter/more qualified than US labor. In my experience, (hiring in Phoenix) that is simply not the case if you're willing to pay the prevailing wage.
Yeah, this was my first though too. Even outside of the US you see companies wondering why they can't find good local talent, except they're offering wages too low for any qualified applicant to live on. Pay peanuts, you get monkeys (or the extremely desperate/exploited).
That's all the excuses I can think of. Some of them may be honest, just ignorant.