Now what I *think* you're saying now is a) PHBs think that Indians make better developers and b) they aren't better developers.
The real issue isn't actually a) - it's c) they cost a hell of a lot less than U.S. developers, and PHBs haven't gotten their mind around the idea that throwing more manpower at a project doesn't make it come in quicker or better. They just see the x*y math, and that's it.
It's like the pot full of crabs. None of them escape because they all knock each other down trying to climb out.