My father-in-law asked me whether they have trees in USA!
It took a long time for my relatives in India to understand the time difference and they were even more perplexed by different US time zones.

Once when I called a travel agency, the agent asked me to wait until she would find a chinese speaking agent (I am from India!).

When I lived in Austin, Minnesota someone asked me whether I was a "N...". When I said I was an Indian, he said, "Don't feel bad; I also have Indian blood in me"!!!