Perhaps English isn't your first language, so just to point out that "degenerated" often has a negative connotation, involving notions of corruption or lack of morality. Indian Buddhists would vehemently deny that their Buddhism is degenerate compared to China. Indian Buddhism has a much longer history and direct connection to Buddha himself. They would point to the chain of Chinese scholars such as Chen Hui (Xuanzang) who visited India to copy and carry back Buddhist texts to periodically reform Buddhism in their own countries. They could only do this because Buddhism survived in India and retained those texts so they could be copied.

Perhaps you meant "declined" rather than "degenerated".

While I can't answer your question, I'd point out that even if China was a bit far off, Indians were well aware that Buddhism had taken strong hold in their neighbors like Burma, Thailand, or Cambodia. Indians traded with and maintained contact with these countries for thousands of years, long before the British appeared. So I don't know if they would have been surprised to find Buddhism a bit father afield in China as well.