Nortel Networks Corp. is setting up a product design, development and testing center in Bangalore, India, in a move to take advantage of lower staffing costs in the country.

The Nortel Technology Excellence Center will employ more than 100 engineers by the end of the year, Nortel said on Tuesday. The initial staff comes from the India development team of Tasman Networks Inc., a router maker that Nortel acquired in February.

The center will work on advanced routers, Ethernet switching, security and VoIP (Voice over Internet Protocol ) technologies, Ravi Chauhan, Nortel’s managing director for India, said on Wednesday.

Nortel outsources some of its product development work to Indian companies, including Infosys Technologies Ltd., Wipro Ltd. and Tata Consultancy Services Ltd. The three companies have about 3,000 staff working on Nortel projects.

Setting up the new design center will not affect Nortel’s outsourcing contracts, according to Chauhan. The outsourcers work on development of Nortel’s enterprise, wireless, core switching, and optical networking product lines, he said. Nortel does some product development in-house as well as through its contractors, he added.

The Brampton, Ontario, company also has a minority investment in Sasken Communication Technologies Ltd., a software services company in Bangalore, which offers services to Nortel’s customers.