I'm not sure if that's fair. If you produce a labor-intensive product of such variable utility (engineers), then you would expect the utility to drop to reach a price equilibrium. If there wasn't a demand for crappy engineers, the quality would rise - along with price.

Therefore, their education is lousy precisely because these engineers are employed.

India may just have conditions of production, whether by providence or design, that are more efficient at producing minimally satisfiable engineers than anywhere else. Of course I'm talking about a hypothetical India that produces engineer shaped widgets - so no offense intended:)