Now the fourth largest reservoir of scientific and research talent in frontier areas of research in the world, India is poised to emerge as the preferred hub for knowledge-based industries.
Its skills in the knowledge economy are not restricted to information and communication technology alone, but spans agriculture, defence, novel drug discovery, biotech, nanotechnology, missile technology and space.
India's efforts to become a superpower in knowledge economy are spearheaded at the highest level by President A.P.J. Abdul Kalam, who is a noted scientist himself, and Prime Minister Manmohan Singh, an Oxford and Cambridge-educated economist.
"It is often said that the 21st Century will be the knowledge century. We in India are proud of our inheritance in this regard," Manmohan Singh told India's 4th annual conclave to connect with its vast diaspora in the southern city of Hyderabad recently.
The Prime Minister has also proposed a Diaspora Knowledge Network that will establish a knowledge corridor between India and the top achievers in the 25-million diaspora spread across 110 countries.
Microsoft, General Electric, Intel, IBM, Boeing and Google are some of the 100-odd global firms that have already set up R&D centers in India, and many more are actively considering similar facilities.
In fact, a study by the Confederation of Indian Industry (CII) estimates that India would emerge as a $17-billion hub for knowledge process outsourcing by 2010, growing at a staggering 46 percent annually.
India's strength lies in areas such as pharmaceuticals, biotechnology, information and communication technology, legal support, intellectual property research, and design and development for auto and aerospace, says the apex business lobby.
"I have immense faith in the intellectual capital of India and the amount it can contribute to GE's success," says Scott R. Bayman, president of GE India, which has a John F. Welch Technology Center in India, the largest outside the US.
"India is rich with bright, young talent. Indian engineers are quick to grasp Six Sigma and make it their way of working," Bayman told IANS during a recent visit, referring to the strict quality standards of GE that is being mirrored at the India center.
GE's state-of-the-art lab in Bangalore does R&D in areas such as engineering, electronic systems, ceramics, metallurgy, catalysis, advanced chemistry, new synthetic materials, polymers, process modeling, simulation and IT.
In a recent study, global consultancy Frost and Sullivan said India had taken a lead over China in the global movement to outsource R&D, while a McKinsey survey said large corporations find India a more attractive hub for R&D than China.
"All this is happening because of the rich and vast talent pool of technical manpower in India," says S.R. Rao, scientific advisor in the Ministry of Science and Technology.
"It is estimated that the headcount of our scientific manpower is arguably among the top five in the world and second-largest in terms of knowing English," says Rao.
To sharpen India's knowledge edge in the 21st century, Mr Manmohan Singh has established a unique body, the Knowledge Commission, under Sam Pitroda, who led India's telecom revolution in the mid-1980s. The commission advises the Prime Minister on how India can meet the knowledge challenges in areas like education, scientific institutions, intellectual property and agriculture.
"This is a unique opportunity to leave behind the British legacy to invent a new India using knowledge," Pitroda says, adding he would focus on how knowledge can be deployed to change the lives of the average citizen.
In fact, state-run research institutions and private sector companies in India have already started grabbing global attention with success in some leading edge areas of science and technology.
The country has conducted a test flight of Saras, an indigenously developed civilian light-transport aircraft, developed by the state-run Center for Civil Aircraft Design and Development.
According to the Department of Biotechnology, 165 institutions in the country are engaged in genetic engineering research - 55 in transgenic work, 25 in therapeutics and 85 in basic research.
India has started commercial cultivation of genetically modified cotton in the western state of Gujarat and some southern states, with several other crops in various stages of getting approvals for commercial plantation.
In stem cell research, the US Department of Health wants to fund two Indian institutions - Reliance Life Sciences, backed by the country's largest private sector group, and the Bangalore-based National Center for Biological Sciences.
India is the only country from the developing world and the sixth globally to fabricate and launch its own satellites in geo-stationary orbit, with even has plans for a moon mission in 2010.
Even in the field of collaborative research, some new trends are emerging.
India's largest software company, Tata Consultancy Services, for example, has collaboration with the Carnegie Mellon University to investigate emerging trends in economics, management and technology for the software industry.
The Bangalore-based biotech company Biocon, like other home-grown pharma majors Ranbaxy and Dr. Reddy's, is attracting attention from companies in the US and Europe, which are seeking a strong platform for development skills.
"India needs to break away from imitative to more inventive R&D to realize the potential of its innovative skill base. This is where the Silicon Valley scored," says Biocon founder Kiran Mazumdar-Shaw.
"But it is heartening that Bangalore and Hyderabad are seeing the emergence of scientist-entrepreneurs. We need to see many more," says Shaw, who became the richest Indian woman with a wealth of $400 million when Biocon was listed in 2004.
India today has more than 250 universities and many more R&D units, professional colleges and institutions. On an average, more than 350,000 engineers and 5,000 PhD scholars graduate from Indian universities and colleges every year.
"With such a pool of qualified, English-speaking scientific and technological manpower, India must have the ambition to become a large base of research and development activity," Manmohan Singh told the Knowledge Commission recently.
"The time has come for us to create a second wave of institution building and of excellence in the field of education, research and capability building in India so that we are better prepared for the 21st Century."