I would be glad to hear from Indian engineers who are doing 'R&D'. US companies don't do R&D in India, but they do spin a lot about doing it. 3 months later the poor engineer realises this is not the sort of 'R&D' he was thinking about.
Indian technology companies are risk averse and arbitrage oriented. R&D is something they are really not interested in or have the appetite, skill or expertise for. I am sure there are exceptions to the above, but they are just that, exceptions. I have heard Tejas networks, Mindtree, Sasken do some stuff and I am sure there are many others but perhaps individuals who work here will be better positioned to comment
This is not a criticism of the current IT industry, there is room for process oriented service companies with little interest in innovation and place for companies that are interested in innovation.
The later hasn't happened yet but because of the former we have a whole class of Indians who are getting paid decently and kick-starting the economy. Whatever criticism you may have of IT, this is the first industry that started paying well and sharing more of their profits, before them 8-10k would be a good salary with a minority of the business owners cornering money in the economy and creating zero demand. Even then compared to what they charge for the individual engineers services they could pay better.
The sad truth is we don't have an R&D culture or the infrastructure to support it, right from education to industry and government. The first sign of a developed country is high wages and per capita income, IT services has raised the bar here but we will need R&D and innovation to move up the value chain to create products and services for the world market and in the process add more value to our engineers and inventors, have more per-capita income, more consumption, more employment, more growth and prosperity all around, who will then have no need to seek an MBA.
In the meantime Indian IT engineers continue to miss the engineering part of their jobs, maybe 80% reconcile to a good salary, get married and buy a house but there is the 20% that are passionate, bright and talented for who the current system is totally frustrating.