1. Increasingly my reaction to the word "Indian" is one of mild shock and discomfort, like my reaction to your first example word.
2. I would never describe Native Americans as "Indians", as the word is increasingly considered politically incorrect. Considering how "geographically incorrect" it is makes it even more unacceptable to me and many other Americans. I believe several newspapers' sports sections have decided to stop refering to the baseball team from Cleveland (the Indians) and the football team from Washington DC (the Redskins) by their insensitive nicknames. For those who find the term "Native Americans" too cumbersome, a easy alternative is to use the name of the specific nation ("tribe") you are discussing instead of generalizing.
Only secondarily do I think of "someone (or thing) from India". Perhaps if people stop using the word to refer to Native Americans, it will also clear up the confusion currently inherent in the term. I have ofen heard this exchange:
"I was talking to an Indian friend --"
"American Indian or India Indian?"
"Oh, India Indian. Anyway, I was talking to a friend from India, and ..."
Just my humble opinion, but that's what you were looking for, wasn't it?
Flatlander
