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Google's Nexus 7 Will Not Recognise Your Pen Drive!
Saturday, June 30, 2012:
In the price race, Google might have done an extraordinary job by stuffing in NVIDIA Tegra 3 along with the latest Android 4.1 aka Jelly Bean but it has compromised on some minor but crucial elements. The Nexus 7 tablet doesn't have the support for USB On-The-Go natively and has no provision for MHL (Mobile High-Definition Link) either.
You can plug and play your USB mouse and keyword with the Nexus 7 tablet but it will not recognise any USB storage. This could be more of a software related problem rather than hardware as USB OTG needs compatible drivers and it might be that Jelly Bean doesn't have it by default. The problem might be fixed by airing an update in the coming days, but as of now, you cannot increase your storage space by using a mass storage device.