The scope of research and development has dramatically changed in India due to the presence of internationally reputed institutes and a vast talent pool of qualified scientists and engineers, says Unctad.

India is also attractive for research and development work since domestic trans-national companies have become global players by forming alliances and other relationships overseas, says the agency's "World Investment Report 2005".

"In 2004, more than 340,000 students were admitted to bachelor degree education in engineering. India annually produces about 120,000 chemists and chemical engineers," says the report released globally Thursday.

As a result of these factors, several trans-national firms are hiring qualified professionals to set up research and development units in India in fields like telecom, computer operating systems, medicine and avionics, the report says.

"Indian software companies, Tata Consultancy Services, Wipro and Infosys, for example, have alliances with Ericsson, Nokia and IBM. Similarly, Indian pharma companies such as Dr Reddy's and Ranbaxy have research and development alliances with Novo Nordisk, Novartis and GlaxoSmithKline."

Interestingly, the report says that government incentives were unimportant for these companies, and that the use of English as a business language and medium for technical and managerial education was an important factor.

The report says the change in India's tech sector started in the 1980s when multinationals started coming into the country. The shift further increased in the 1990s as these industries diversified their activities in the country.