The authors of the piece forgot to point out one part of the wrongness of the whole thing: the logo font is a popular one called Algerian.
I think the caption does a good job describing the problems with this toy. But I'd call it the figure a spaceman, not a robot.
Naturally, this demonstrates what the world thinks of Indians. You have a chief, a maiden, a totem pole, and some Native designs and fringe. But these aren't even important enough to match to the toy. The words and images are only a bait-and-switch gimmick.
The main question is: What the heck were the Chinese thinking? The only thing I can imagine is they think Indians live in a sci-fi fantasy land. You know, with pirates, fairies, Smurfs, and aliens. Thus it's okay to switch from one fantasy figure (an Indian) to another (a spaceman). Because they're all part of the same fictional universe.
For more on the subject, see "Cowboys and Indians" Images.