How do Indian Software companies cheat clients?

Well for the beginning, it is going to be double billing... (of the hard-workers) Definitely not done by any of the ISO or CMM certified companies.

Don't think that they will create names... but, if the clients insists on

(1) provide with roll no's
(2) surprise conf calls
(3) resume delivered
(4) training charged
(5) testing team is always another project team from a different client, without much ado

Thats why they are hiring in truckloads from campus...

Only time they might get caught is, when they are screwing up two clients, and they both ending up merging and checkout on outsourcing candidates....

Also some companies, might give tests and get half the work done (if they dont, they say you are unfit for company, even though they selected in first place - 13.5% is the hit rate in this mode), while 10% of people, slog out to finish the work for client. The rest of 70% other than 20% trainees, and take away another 30% for HR, Admin, other staff, giving you about 40% as the number (10% Senior Mgmt - Maaman, Machchan, Thaatha and Paati's) would be really slacking 9 to 5. I bet those 10% are stuck for life there.

while
others (slackers) sit in meetings
to setup other meetings
the feared work hard to bring in mocha
end

Desert

(with a banana topping)

The HR team (with recruiters/consultants) might (LOL!) end up hiring paid trainees and later sack them after they run out of the money paid as salaries minus the costs of space/pc-time/etc.,

I just remembered how CNN IBN exposed about people walking into big companies paying money. I heard 2 such incident personally from friends, but the guy's were better than the best recruited by the company, so the party goes on, with no increments and low salary.... with fear in mind.

Disclaimer

The above had not happened in any of the companies I have worked with, nor the one I ran (run).