I agree that India has not been the best in terms of tech innovation but the situation is changing. The start up ecosystem is booming here and investments are following too.
Startup ecosystem is booming on foreign investment especially from china. Local investment is still dire.
Students from IIT in India are filtered from millions of students. They only take about 10-15k students every year and the rest are in NIT and other relevant institutions (around 50k). About 1 million self selected students participate in jee-mains every year. I only meant to highlight that OP's friend may be biased compared to the common situation here.
Here is the article for chinese investment in top Indian startups - https://www.vccircle.com/here-s-a-snapshot-of-key-chinese-in...
With government trying to shut down foreign investment, I don't see investment opportunities in India increasing.