According to the Global Innovation Index, India is only two ranks lower than its 2012 rank and four lower than its 2011 rank. The index is prepared by the World Intellectual Property Organisation, Cornell and INSEAD with Knowledge Partners, Booz & Company, the Confederation of Indian Industry (CII), du and Huawei. India ranked third amongst Lower Middle Income countries, first amongst Central and Southern Asia, and 11th in the overall efficiency rating.
All of this may be surprising given the fuss over health and pharmaceutical patents, compulsory licensing and pharma pricing. The full report on the Index from Spicy IP is here.