The answer would be: 1) they do, and 2) they can't
1) Google clearly hires plenty of people in India. Here's their new office in India, with allegedly ~10k employees: https://careers.google.com/locations/hyderabad/. The assumption that Google is only hiring "expensive american employees" vs "cheap indian employees" does not hold
2) Talking about "american" and "indian" employees is misleading. Your question could just as well be "Why not hire for $100k from <midwest> instead of $370k in CA?" At that level of salary, you're talking about attracting top talent from around the world, who are often happy to migrate. The salary is a reflection of an arms race between tech companies - the same person isn't going to opt for $60k to stay in India - they will either take a $350k job in Facebook, a $300k job in Amazon, or at worst, a $100k+ remote job to stay at home(numbers are illustrative). You simply cannot attract the same talent due to how global(and competitive) the top-end of the programming marketplace is.
> Why not hire for $100k from <midwest> instead of $370k in CA?
That's not a realistic comparison. That's a comparison of an average-ish salary in the midwest to a far above average salary in CA. Realistically, it's more like $100k in the midwest vs $130k in CA or $370k in CA vs not being able to hire anyone in the midwest because there isn't enough volume to be able to find someone who's that much of an outlier.
1) Google clearly hires plenty of people in India. Here's their new office in India, with allegedly ~10k employees: https://careers.google.com/locations/hyderabad/. The assumption that Google is only hiring "expensive american employees" vs "cheap indian employees" does not hold
2) Talking about "american" and "indian" employees is misleading. Your question could just as well be "Why not hire for $100k from <midwest> instead of $370k in CA?" At that level of salary, you're talking about attracting top talent from around the world, who are often happy to migrate. The salary is a reflection of an arms race between tech companies - the same person isn't going to opt for $60k to stay in India - they will either take a $350k job in Facebook, a $300k job in Amazon, or at worst, a $100k+ remote job to stay at home(numbers are illustrative). You simply cannot attract the same talent due to how global(and competitive) the top-end of the programming marketplace is.