If you access any of the Blogger hosted blogs from India, Google will automatically redirect you to the corresponding blogspot.in address.
To give you an example, if a blog’s address is abc.blogspot.com and you try opening that page from an IP address in India, Google will send you to abc.blogspot.in. A similar redirection is happening for individual article pages as well.
How to Prevent Google from Redirecting Blogs
If you are visiting a blogspot.com blog and Google is redirecting you to the country-specific blogspot.in domain, you (as the user) can prevent that redirection by adding /ncr to the blog URL. For instance, if the blog URL is abc.blogspot.com, the new URL would beabc.blogspot.com/ncr and it won’t redirect to any other address.

The Problem with Redirecting URLs

The above change is applicable only for free blogs that are served from blogspot.com and does not affect Blogger blogs that use a custom domain. Also, Blogger takes care of the redirection part so none of your existing URLs should return a 404.
That said, there’s one significant downside I can think of. All your blog pages effectively have two different URLs now and that could dilute your Google juice.
Site visitors in India will see your blogpsot.in URL while visitors outside India will be served the original blogspot.com URL. However, if another website links to your .in address and a visitor outside India tries to access your blog via that site, they won’t be redirected to your original .com address. And that’s bad for your site from the SEO perspective.
The other problem is that this change will completely alter your social analytics. If your original blog post got ‘n’ likes on Facebook, the new count will be ’0′ since the URL has changed. Thus social sharing sites like Twitter, Facebook and even Google Plus will see that redirected page as a new web page.

A Possible Solution

I have no idea why Google made such an important change in Blogger without even informing their users in advance  Anyway, a possible solution is that you add the canonical meta tag to your blog template and point it to your original .com URLs. Here’s how you do it.
[Update] – Google has already implemented the rel=canonical tag for the new XML templates though you need to add them manually if you are using the old Blogger template tags.
Open your Blogger template, click the Edit HTML button and look for the following line between the <head> and </head> tags.
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<b:include data="post" name="all-head-content"/>
If you are not using the standard XML template and the above tag is missing, just add the following line to your Blogger template inside the <head> tag. [Thanks Aneesh Joseph]
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<link expr:href="data:blog.canonicalUrl" rel="canonical"/>
The above code is valid for the XML version of Blogger templates but if you are still using the Classic Blogger template, the code is a little different:
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<ItemPage><Blogger>
 <link href="<$BlogItemPermalinkURL$>" rel="canonical"/>
</Blogger></ItemPage>
With this canonical tag, we are telling search engines that even if they encounter our blog page with a .in address, they should only consider the .com address as that’s the original source.
Also, Blogger automatically inserts the rel=canonical tag in your blog templates so you are effectively adding one additional tag will will appear above the original one in the HTML source. When Googlebot encounters multiple canonical tags on a page, they respect the first one so the generated tag would be ignored.
This is obviously a workaround and am hopeful that the Blogger team would come up with a better solution – one that preserves the Google juice of your blog.

Behind the Scenes

I was looking into the HTTP headers and it looks like Blogger is doing a 302 temporary redirect between .com and .in domains. However, no such redirection happens when you directly access the .in blogspot URLs even from an IP address outside India.
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HTTP/1.1 302 Moved Temporarily
Location: http://labnol.blogspot.in/
Content-Type: text/html; charset=UTF-8
Content-Encoding: gzip
Date: Tue, 31
<HTML><HEAD>
<meta http-equiv="content-type"
   content="text/html;charset=utf-8">
<TITLE>302 Moved</TITLE></HEAD><BODY>
<H1>302 Moved</H1>
The document has moved
<A HREF="http://labnol.blogspot.com/>here</A>.
</BODY></HTML>