How is a non-resident alien taxed in the US - does he get the advantage of graded tax slabs - 10% up to XX then 15% and so on or does he pay a flat tax?

Yes nonresident gets advantage of graded tax slabs.

Thanks MukatA,

That's really a very big advantage then. People can get the advantage of graded tax slabs in both the countries if they file non-resident return in both the countries and thus save a lot of tax.