The usual IANAE(I am not an economist) and random weekend ramblings.
Currently the Home Loan interest rates in US fixed interest for 15-30 years are between 6 to 6.5%. The Home Loan floating rate in India is between 10.5 to 11% and I am told only 5 year fixed interest rate at 12% is available%. USD is slowly sliding against currencies of the world including the INR. The incentives for moving money from US to India are far greater than from US to China (what with their overheated stock market and realty). The interest rate on personal loans and credit card debt are similarly plagued with un-productive and un-sustainable interest rates. On the other hand the interest earned by small investors on debt instruments remains relatively low, reflecting an in-efficient or non-competing oligopolistic market.
Capital flows, discounting for relatively un-safe business environment and weak property rights would be naturally in the direction of high interest rate bearing economies with an appreciating currency. Currency appreciation is further accentuated due capital flows themselves. Indian corporates and Indian peoples are subject to a high interest rate regime thanks to the capital controls not allowing them access to cheap capital wherever in the world it is available from. All this while the borrowings from World Bank continue un-abated. Sovereign debt India needs to repay stood at 114B USD as of 2005 (source: from deep inside worldbank.org).