When Armin Bruck, managing director of Siemens in India, set out to convince the board of the German engineering company of the potential of Indian innovation, he gave them the keys to a Tata Nano. He wanted to convey the "smell and feel" of a revolutionary mass market product and to persuade his company that it should improve its pipeline of local inventions aimed at Indian consumers. So, in February, Peter L?scher, the company's chief executive, and his colleagues Heinrich Heisinger and Joe Kaeser piled into the world's cheapest car - priced at $2,000 (€1,630, ￡1,350) - and drove round New Delhi.

The test drive fortified Siemens' effort to reconfigure its strategy for developing its high-quality engineering technology for low-cost emerging markets. After all, if it could be achieved by an Indian company with a car, why couldn't the same approach be taken by Europe's biggest engineering company with iron and steel making equipment, electricity generators and rail carriages?

The technological race for India and China's growing markets among multinationals like Siemens and General Electric, and lesser known local companies like Larsen & Toubro, Bharat Heavy Electricals, Delta and Neusoft, is hotting up fast.