Well after building a business in India for almost three years (2000-2003) I'm pretty disillusioned with the amount of R&D you expect from there but this article suggests otherwise:

"These are not drudge jobs: high-tech companies are coming to India to find innovators whose ideas will take the world by storm. Their recruits are young graduates, straight from India's universities and elite technology institutes, or expats who are streaming back because they see India as the place to be - better than Europe and the US. The knowledge revolution has begun."

"For the New Scientist reporters who have been in India for this special report, many features of the country stand out. First, its scale and diversity. With a population of more than a billion, the country presents some curious contrasts. It has the world's 11th largest economy, yet it is home to more than a quarter of the world's poorest people. It is the sixth largest emitter of carbon dioxide, yet hundreds of millions of its people have no steady electricity supply. It has more than 250 universities which catered last year for more than 3.2 million science students, yet 39 per cent of adult Indians cannot read or write."