Disclosure: Indian W'15 applicant here.
Very pleasing to my ears. Few days back @sama also mentioned in one of the interviews to local print about wanting to make inroads into India and I welcomed it. Done properly YC can get nice response here.
Some of the challenges or differences about Indian start ups which you might have to address are:
a) Visa related issues: This is taken for granted by applicants from EU and other visa-on-arrival countries but it's a huge Qn mark for Asians. eg: I still don't know if we're selected for interview will I have to arrange for a B1 or B2? Will we be able to get it within a month? (There's an elaborate application process with long waiting periods - US embassy is notorious for rejecting on flimsiest of reasons). If we get selected, I'm still bit unsure what visa will be applicable for the 3-4 months of incubation period. To what extent YC will be involved in visa process. What happens after that? Some of these things are not laid out upfront in YC FAQ as of now.
b) Incorporation: The more you branch out into Asian territories the more likelihood that for many startups it won't make sense to incorporate in USA. Or maybe have a dual structure with HQ + subsidiary in USA/$home country (Ours might be dual). On the other hand there are some SaaS cos who have a Delaware co just for ease of seting up merchant a/cs and ease in collecting recurring payments (We still don't have Stripe here).
I know this comes later in the picture but I think some of the uncertainty around these Qns would keep many an Asian startup from applying.
For someone in Boston, if he doesn't make the cut, he can always go back to his home and figure our whatever he wants to do after 3 months. He loses just 3 months of his time. For many of us it's not easy to decide to upend your roots/family everything for that one chance of making it big only to realise all the wind is out of your sails after 6 months due to some stupid visa/IRS issues or for that matter even FDI/tax guys back in our home countries (eg even huge cos like Amazon India with billions of dollars investment in their Indian arm, are still caught in Indian tax/FDI redtape - they're facing an ongoing struggle against authorities as well as entrenched local retail community. They are forced to operate as marketplace and still have to dance as music changes). There's a reason why we're #134 in ease of doing business and #179 in Starting a business (out of 189).
So I think a clearly thought out YC roadmap on visa/incorp in itself would be a huge bump to smart founders.
b) The type or quality of startups in India is slightly different than the typical SV co. The typical SV startup goes: Stanform/MIT grads, batchmates, started building a SaaS/app2.0 product in final-year from dorm -- where you first figure out how to get millions of users and then sometimes after SeriesA maybe think about monetisation. Many of them get acquihired, defensive acquisition before making a cent in revenue. The good startups here in India that I like are mostly revenue generating from day one. Enough to have founders earning 3x+ of his erstwhile salaried job. They might not have hockey-stick growth in millions within months. A hockey-stick chart of nonpaying users is as good as 1/3rd of same chart of solid profitable paying users I reckon.
c) The way you do due diligence has to be slightly different. Yes there are lot of smart founders but just due to our sheer numbers you'll also find more shady characters (which in absolute nos would be a huge jump from what you might encounter in SV, even if %wise same - so a perception problem), so you'll have to gradually build up your sniffing skills in other vectors and also set your internal founder-meter accordingly. Plus there's a lot more diversity here in social/living conditions hence the founder diversity that goes with it. Which also means the good founders might be disproportionately outliers on the map which YC or SV references. eg: IIT gets a huge mindshare in SV but I see more startups from non-IITians here.
There are lot of similar subtle things from an Indian founder's perspective. I know coz I've grappled with some of these until I studied and organically warmed up to an idea so strong that made me jump through all the hoops and decide to go for it.
Would be glad to discuss any further - my email is in profile. (or in person alongside YC interview :-)