There are two variants to this.
1. A hosting provider based in India as a company but with a NOC or DC elsewhere, probably US or Malaysia or UK.
2. A hosting provider who have their NOC and DC in India itself.
Let us acknowledge one thing, Indians probably know more about hosting than most other people owing to all the off-shore work. Having said this, a native Indian user would rather prefer a company which has a DC in the Western Hemisphere if his website is going to cater to that audience.
If he has needs and services targetting India and the sub-continent, he is better off going with a provider who have their NOC and DC in India or atleast Asia. (The only deterrent here being the cost of real time bandwidth in India being very high).
Now about the reliability factor of "Indian Hosting Providers", I would very strongly stamp it saying none of them are fly by night operators. Most of them are here for the long run and to make it big. A typical indian hosting company would be selling hosting, domain names, website development, web-design services and also SEO services probably.
This is proof enough of them being genuine and real 
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