There are over a billion people in India. The competition here is very high. Yet the quantity of developers is high than their quality. Here I will list some problems that India has, which not only affects India, but everywhere
CS course has the most amount of students (ECE next,etc). Yet a large quantity of people have no idea why they're pursuing it. The reasons those people say are - "job security", "safe job", "6-figures". What can we expect from these people except to saturate the market? Yes, in every country, there are some percentage incompetent developers, but this effect is more pronounced, considering the population.
But, India fails to give quality education to its population. Best colleges like IITs, NITs, accept very few people so that most people don't get the quality they can get in other countries like USA, CANADA. IIT's acceptance rate is 0.008% (10,000 accepted out of 1.2 million).
Quality of education is so low in other colleges than IITs, NITs - worse than what bootcamps can offer. Syllabus of other colleges are very outdated & aren't useful for anything. They use TurboC++, Adobe WebDesigner,etc. - are they not aware of what's new? Teaching Java or C++ instead of Python - why? Bootcamps are even worse here - some of those who failed to secure a job after bootcamp will teach at the same bootcamp, creating a Pyramid Scheme™
Due to increasing numbers of developers, the market is saturated so much. And India wonders why so many Intellects move to work in America, not in India. Due to incompetent devs, interview gets harder - like asking about inverting binary trees for junior web devs. And many devs are ready to work at salaries so low, not realising their self worth. Thats why India is so preferred for Outsourcing. The market is so saturated that, these devs are ready to take up any job - like laptop servicing, street food shops, etc. India is better for outsourcing than producing actual products or services - which is not something to be proud of :-(
Startup culture isn't much prevelent in India. IT consultancy companies are the ones richer than startups. These companies replace good devs with freshers, because instead of giving 1 senior dev with high salary, they can divide that salary and recruit many freshers for low wage. This continues until these freshers get laid off and cycle continues.
Also, learning opportunities in these companies is limited. You get a Enterprise Legacy CodeBase, and you will only know that - no opportunity to learn new techs (you can, but they dont provide with that opporunities). These devs focus on moving up the Corporate Ladder™. They just want to work few years and become a manager - because they value Position over Skill. They stare at people who work for 10 yrs to become "senior dev", advising them to "move ahead in life". They are less interested in the projects they get from clients - just want to get job done - not learning more things. Maybe this is the norm in Corporate Culture, maybe i'm not aware of that :)
These are the main issues among others. India can do better. These problems are not tertiary, but are fundemental root causes. This not only affects India but everyone. Startups culture is less prevelant in India than in other countries. Unless India promotes startup culture, expands opportunies for quality education to even more people, and takes this issue seriously, this issue will be a drag on the economy.