Yes - great points all Naresh. India is a very technologically advanced country, provides great engineering and manufacturing capabilities, and a much lower cost. But you're forgetting one point that's very important to all countries:
We have our own economies to think of. America has done so much outsourcing that it is on the verge of collapse. Well paying manufacturing jobs have all but disappeared, and engineering jobs are going that way as well. I was one of the first people to jump on the outsourcing bandwagon, but in retrospect now think how foolish that actually was. Yes we have cheaper products, and yes corporations have made higher profits... but to what extent? The fate of the American worker is dismal - and the American economy shows the effect. No, I'm not blaming the entire state of the American economy on outsourcing - but it has played its part.
So should Europe outsource its engineering design to India? Take a look at America as your model...