Last year 1,73,735 candidates took the CAT admission test through which the IIMs admit 3,335 MBA students. That's a 1:52 ratio.
Now you could argue that not everyone who takes the CAT is an IIM applicant. So let's take IIM Ahmedabad's (slightly dated) data for 2006-08 admission . Of the 1,44,027 who applied to the institute, 273 secured an admission. That's a 1:527 ratio.
Harvard Business School's admissions:applications ratio is 1:12 
I'm sure you have an explanation of why a 1:527 ratio is "not that hard".
If that is the case then you can't compare the numbers directly, since you have a very non-trivial number of students who are rolling the dice.
In contrast Harvard is very upfront about their requirements, causing most people to avoid applying if they won't qualify.
Plus in the scale of India's population you get a lot of kids, who are working for years to crack the examination. So the only way to create a selection process is to have a crazy difficult exam.