Your point on India's growth rate likely to be higher than US is well received, but I want to understand something more tangible. Let's say I invest a dollar in India which grows at 7-8% risk free just using the FD instrument. At the end of each year though, US Gov will tax that growth at 30-40%. Next, If one repatriates that money, one loses even more value due to currency conversion. So in effect, your money grows at 4% most likely.
4% growth + tax paperwork hell seems imprudent. I'd like to learn what am I missing here? Many of my NRI friends don't bother investing in India. There is a serious lack of education in this regard.