Hi Jeff,
I am an Indian and I am applying to BSchool for Fall 2010.
If you think Indians applying to Foreign Universities are a high number, I would like you to take a look at numbers applying to BSchools within India as well. It is in the mind-boggling range of anywhere between atleast half a million to a million each year, if not more.
As an example, at the top rated Indian Institutes of Management, there are roughly 3 lakh students who apply for a written entrance test each year and around 3000 get in. The selectivity is lower than even H/S/W.
But, I suppose your question is towards large number of Indian applicants who apply to schools abroad.
There is no easy answer there, so I am listing down a set of reasons and a random combination will give you your answer.
1. Better career prospects
2. $$$
3. Better industry focus and curriculum abroad
4. Chance to live abroad
5. Emigration
6. Low wage levels in home country
7. Social compulsions
8. Weightage for work experience in BSchools abroad
9. Hard working and intelligent, Indians can and do compete with anyone anywhere, given a level platform
@DanaJ: You are right. But the same is applicable for any ethnic group and not just Indians. If not, there would not be so many varied ethnic groups like Latin-Americans, Chinese-Americans, Italian-Americans et al.
Do your best without expectation!