Well phones sold in certain countries like the US are locked depending on the service provider that sold the phone. They lock them so that they will not work on other networks. By unlocking, you break that lock so that you can use the phone on any network that you want. In India, all the phones sold are unlocked, i.e., you can buy a phone and use it on any network. As a result, the phones are uniformly priced. In the US, it is cheaper if you buy a phone from your service provider but then the phone will most likely be locked.
I hope that helped.
