Skill engineers and scientists are despite terrible universities, not because of it.

A more accurate statement might be that non top tier universities are terrible?

After doing a little hiring of Indians and working with them I get the impression that the top tier universities are pretty good, but the second tier and below are a lot worse in comparison to similarly ranked institutions in the US.

I initially agreed to your post, but as I reminisced the interviews I took I disagree and I think its the same everywhere. Second tier schools in US are equally bad and students lack practical knowledge. If I were to take an interview without knowing the persons race I don't think I will be able to bucket them into specific countries based on their performance.

Even there, there is selection bias. They admit only most brilliant students, and claims their is best university.