Whether this was the cause of the deaths of the 49 babies over a 30-month period after they were subjected to tests at the All India Institute of Medical Sciences (AIIMS) is hotly contested. The institute is the largest hospital in India to offer subsidised health care for the poor.

AIIMS authorities say the babies, who were among a total of 4,142 infants on whom a new drug was tested on behalf of western companies, were seriously ill and would probably have died anyway.

But the Uday Foundation for Congenital Defects and Rare Blood Groups, which uncovered the deaths by using India's new freedom of information laws, has filed a complaint against AIIMS with the National Human Rights Commission.

'The poor here don't have access to good medical care so obviously they will opt for getting free treatment as volunteers either for themselves or their children. But can that be called a free choice?' asked foundation founder Rahul Verma.

Mr Verma spends much of his time going from hospital to hospital for his three-year-old son, Arjun Uday, who was born with multiple congenital deformities. He wants to highlight the need for better regulation of the trials. It is estimated that the market value of clinical trials in India will reach almost US$1.6 billion in the next two years.

But it's not just the cost that has made India a leading destination for western drug companies. The huge population also offers a diverse gene pool, plus large numbers of English-speaking doctors and scientists. There are some 612,000 doctors, 14,000 general hospitals and over 170 medical colleges in India, not to mention thousands of laboratory technicians and scientists.

Last year alone, about 136 trials were outsourced to India, and there are about 400 currently under way.

'To save time, drug companies need to get large numbers of volunteers quickly. They can do that in India because the poor are desperate to get good, regular treatment for free,' said Mr Verma. 'This is different from the west where people either have medical insurance or get medical help from the state so they don't need to volunteer.'

It is difficult to get anyone in the United States or Britain to volunteer for clinical trials. If a company needs 200 patients to test a cancer drug, it can get them in India in a few months. It might take three or four times as long in the US.

The concern of civil rights groups is the ethics of using poor, illiterate Indians as volunteers in clinical trials because it is hard to establish whether they understand the implications of consenting. 'Informed consent is a delicate and controversial issue, even in the developed world where people are generally better informed and educated,' said Sultan Ghani, director of the Drug Information Association in Mumbai. 'Even the first stage - screening patients - has to be done very carefully. In India, it is very sensitive indeed because of the poverty.'

The association, which is involved in the discovery, development and regulation of new drugs, has opened an office in Mumbai because it expects 15 per cent of the world's clinical trials to be held in India by 2011.

One of its objectives is to train the people who work on clinical trials to bring them into line with international best practice, and that includes the best way to screen volunteers and ascertain if they genuinely understand what they are letting themselves in for.

Rashna Cama, head of clinical operations at Mumbai's Indian Institute of Clinical Research, said informed consent was possible, provided there were safeguards.

'We explain everything in the local language in very simple terms and have a witness or a legal representative to verify that we have properly explained the implications to the volunteer and that they have been understood,' she said.

Experts believe that the regulation of trials in India needs to be improved, though Ms Cama said that was already happening.

'Earlier, we had only government guidelines. You could either follow them or not follow them. Now we have strict regulations that have to be enforced so I don't think anyone can take advantage of a poor person,' she said.

However, even the Indian government admits that the regulatory infrastructure is weak owing to a shortage of staff trained in medical ethics and best practice.

The government's Planning Commission said in a recent report that India was short of around 40,000 trained staff for trials - investigators, auditors, and qualified men and women who could serve on ethics committees.

Mr Ghani's association is trying to fill this gap by bringing in international expertise. It is due to start running training workshops for clinical trial investigators.

'You need investigators who know how to select volunteers, monitor them, follow the protocols at every stage, observe accurately the effect of a drug, record the data rigorously - everything has to be to a high standard,' said Mr Ghani.

Ms Cama agreed that a shortage of trained staff was an issue.

'There is a great dearth of good clinical practice practitioners but, having said that, let's not forget that every trial only begins after investigators have been properly trained,' she said.

A sign of the country's inadequate regulatory infrastructure is that even the office of the Drugs Controller General, which approves drug trials, is understaffed. Some of its investigators are also inadequately trained. Moreover, the staff are overworked, struggling to deal with problems ranging from helping police bust spurious drug-manufacturing rings to catching pharmacists selling prescription-only drugs. Opponents of clinical trials in India also argue that most of the new drugs being developed are not much help to people in developing countries.

Millions of Indians need new drugs for tropical diseases such as kala-azar, tuberculosis, malaria, dengue fever and chikungunya but international drug-makers are not interested in them. Critics also point to other issues arising from trials. What if a drug has damaging side effects? Who will compensate those in the trials? Who will treat them? Even if a drug is successful, will it be available to Indians at an affordable price?

One important rule to protect Indians from being used as guinea pigs is still in place. Foreign companies are allowed to hold trials of new drugs in India only while similar trials, at the same phase, are being conducted elsewhere. But they cannot perform phase-one trials, where a new, untested drug is introduced into a small group of healthy people to understand its action and side effects before it is given to a larger number of patients in phase-two and phase-three tests - at least not yet.

There were murmurs from the Indian health ministry about relaxing this rule earlier this year but voluntary groups will fight it tooth and nail, particularly after the latest incidents at the AIIMS. They fear the vulnerability of India's poor could be abused in phase-one trials.

'They are so ill-informed and in awe of anyone in authority that they will blindly do whatever they're told by anyone who looks better off than they are,' said Akash Durani, a New Delhi social worker who works with the destitute. 'If that person happens to be in a white coat, too, then the obedience levels rise even further. It's impossible for an educated person to understand how little some of them know.'

Mr Verma makes the same point about the rich-poor divide. 'Do you think the rich will let their children be experimented on, or enrol as volunteers themselves? It's always the poor who end up being messed around, because they are expendable,' he said.

He is not letting the AIIMS forget the deaths of the 49 babies. His son has been treated there and he has a high regard for its staff. But he is unhappy that Minister of Health and Family Welfare Anbumani Ramadoss ordered an internal probe into the deaths rather than an independent investigation.

'We need AIIMS to tell us what condition those babies were in when they were admitted and what treatment they were given,' Mr Verma said. 'Even more important, it needs to tell us if they were from below-the-poverty-level families. The hospital has not provided this information.' He wants the National Human Rights Commission to force the institute to provide details about the babies' parents so he can verify whether they understood what they were getting into when they signed the consent forms.