India has improved its position to ninth this year from 101st in 2010 in an index that ranks countries on their innovative outcomes compared to the inputs available, but Pakistan and China are ahead of us.

The Innovation Efficiency Index, compiled in a report by business school INSEAD and industry chamber CII, highlights those counties that achieve more on innovations from less conditions. Cote d'lvoire tops the list on this index, released in Geneva, followed by Nigeria, China and Pakistan.

  The Innovation Efficiency Index is part of an overall global innovation index. India's position on this latter, more comprehensive, index slipped to 62nd this year from 56th in 2010. Switzerland topped the list, followed by Sweden and Singapore. Despite good innovative results, India's position is dragged by its performance on business environment, elementary education, tertiary education, and knowledge workers. "But the country has high marks—within the top 40—on research and development (35th); general infrastructure (11th), a result driven by its ninth position on gross capital formation (at 35 per cent of GDP); and investment (15th), a result driven by a deep and dynamic stock market," the report said.

It also said a lot of Indian talent is returning home to the country, the youth in urban India are now more global than ever, “and they are quite in tune with new technologies, even ahead of the curve in many cases, as early adapters”. "Multinational corporations are making large investments in R&D outside of their headquarter countries, setting up R&D sites in low-cost emerging countries such as China and India to access global talent and take advantage of their proximity to target markets," the report said.

Major Indian players such as Tata, Godrej and Mahindras are shifting focus towards the rapidly expanding middle-income group of customers by coming up with frugal innovations, keeping in mind the price sensitivity of Indian consumers, it said.