Marketing gimmick. Though people say that buying a domain and hosting package from the country you live in will help, I personally never had any experience as such. One of my clients asked if buying a .IN domain for his India based website will help him in SEO. I said no and he flatly questioned if I knew about SEO.
But the truth is SEO is domain independent and dependant also but domain names have nothing to do with them. I helped him with a .COM domain from BigRock and showed him the results of another website (.IN) which was from the same business category as his, where the difference was negligible. That's how he understood.
Personally, I feel that domains need to be sold at a service value and pricing value than creating such fuss which spreads wrong information about domains and domain names.