This is India specific challenge. Also schools in India do not really focus on algorithms. In almost all competitive programming competitions and places like TopCoder, India is far behind Chinese, Russians etc. (just count the number of TC Red coders in each country and let me tell you India is equal or even more in quantity) This can partially be attributed to the early age at which kids in other countries are exposed to programming but other than that it is just that Indian schools apart from say top 15 provide crappy CS education.

And while we are at it, in interviews at top CS product companies of which I know about Amazon and Microsoft, lately I have seen same set of questions repeated again and again and people getting through without much of problem solving skills by just mugging up solutions to common problems from sites like GeeksforGeeks, CareerCup etc. Throw them a real problem or a problem for which they have not seen a solution already and they would give a blank stare. Note that I am not saying you cannot find super talented people at these places. But when I have to take a few interviews apart from my regular work, I would head to same sites for interview questions.