This ofcourse does mean that searches will become faster for us. Not that they weren't fast before, but it'll reduce Google's costs as well :P Also, this might be the initial scent of things to come for India, like extending Google Local to Indian territories, and probably allow India to browse through Google Proxies? There are a lot of possibilities when there is a native server farm in the country. This move comes hot on the heels of a sudden boom in the rise of the number of internet users in the country. With big and small players alike, the costs have come down significantly and hence, many more people can afford it now.
Google has had a presence in the market as much as organising annual code making/breaking competitions in Bangalore, in which thousands of hopefuls participate. The winner is given an opportunity to join Google and work for them. Google has been synonymous with search mainly in our country, since none of the other features have managed to get localised. In fact, Yahoo! has managed to enter the markets Google should have, by offering services through mobile phones, in a tie up with Nokia. Microsoft has only had a mild promotion of their Windows XP Media Centre edition.
This step in by Google will surely alert the other players, and push them that much closer to moving here. This is only better and better for India, as the world recognises India as a market just waiting to be tapped. :)
And yes, happy anniversary to the PC. It was today, in 1981/82 that the first PC was unveiled by IBM! :)