Usually the contracts state "net of tax"; I haven't seen this before in an Indian contract. However, I've never used a contract agency in India.
The tax rate is about right for India. The operator will send you a Form 16 which denotes the tax paid on your behalf; it'll also be useful for your US taxes. My operator has an accountant that just filed my taxes for last year (FY in India seems to be April through March) for Rs 2000 ~ 33 bucks. If you're being paid through the agency then I don't know the procedure, but documentation of the foreign tax paid is essential. Don't leave home (literally) without it being promised.
IRS will give you a foreign tax credit for your Indian taxes; there are some factors that reduce this slightly, but you can carry forward what you can't use. Note that the gross pay will pump up your AGI, which in many places raises your state income tax liability.
Find a really good CPA to do your US taxes in a situation like this. Don't listen to pilots on internet forums. This includes me.
