Indians are abandoning big tech and big money to launch startups from home

• Some expatriate Indians return home to start their own businesses.
• Their decision is motivated by India’s growing market size, internet growth and post-pandemic spending.
• They return home to enjoy greater ease of doing business and better support for founders.

Nithin Hassan, 41, has always been fascinated by building something of his own.

As a child in India, he got into trouble by dismantling electronics in his home so he could look inside.

In college, in true startup fashion, he started working at a small company in his parents’ garage in Bengaluru, building computers for friends and family.

It was the early 21st century and the Internet wasn’t the repository of knowledge it is today – Hassan learned from books. Finding mentorship and the right guidance was also a challenge.

Everyone around Hassan told him that his next big opportunity was to go to the United States to pursue a master’s degree. He did so.

For the next 16 years, he put his startup plans on hold and worked at some of the largest companies in the world, including Amazon, Microsoft and Meta.

However, the pandemic seemed to be a turning point. And its aftermath has made India look like a business environment designed in a laboratory: It has just become the world’s most populous country, the pandemic has created pent-up demand for consumer products, and the growing popularity of the Internet has made commerce more scalable, he said.

So Hassan left about $500,000 in annual salary with Meta to return to Bengaluru in December 2023 with his wife and two children. Since then, he has founded two startups.

Hassan is part of a group of expatriate Indians who return home to strike out on their own. As such, it is also part of the trend of reverse migration to India that has been going on for several decades.

The trend began in the 1990s and intensified around the turn of the century, fueled by the economic collapse of 2008, said Binod Khadria, president of the Global Forum for the Study of Diaspora and Transnationalism. Many people who returned to India to work mainly worked for multinational companies.

Nowadays, the impetus for this move often looks a bit different: it is driven by factors such as unstable visa policies and economic recession, which lead to uncertainty regarding employment and length of stay in these countries.

Many returnees find jobs in the technology industry, but the finance, retail and climate sectors also absorb large numbers of Indians abroad, Khadia said. Some returnees return to India to start their own businesses.

India is experiencing a startup explosion. At the end of June, the country reported more than 140,800 recognized startups – almost 50,000 more than last year – and credited them with creating 1.6 million direct jobs.

Of course, not all of these companies will succeed — and some still stumble, like Oyo and Byju’s. However, the chaos in which even established startups try and fail makes India a fair field for new entrants, Hassan said.

Business Insider spoke to six first-time founders about why they recently returned to India after spending several years, and even their adult lives, abroad.

The fastest growing economy

The condition of the economy and investor interest are driving the entrepreneurship boom.

India’s economic growth in 2023 – 8.2% – was the fastest among all large economies in the world. This has led to greater purchasing power that allows companies, including startups, to sell more.

India’s inflation rate of around 3.5% is well below annual wage growth of 9.6%. This makes inflation less of a challenge than with slower-growing competitors, where consumer-facing businesses have suffered from high prices.

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Investors are getting in on the action.

Between 2015 and 2021, the number of unique investors in India has almost quadrupled, although the number is according to PitchBook, tracking is much lower this year.

“Barring a slight downturn in 2022 and 2023 due to global macroeconomic factors, VC funding in India continues to grow,” said Ben Mathias, managing partner at Vertex Ventures Southeast Asia & India.

Beyond financing, domestic growth has also encouraged founders and VCs, Mathias said.

The Indian government’s Universal Payment Interface system has encouraged consumers and businesses to pay online, and now 40% of all digital payments globally are made in India, the partner said.

Schemes like Startup India, which provide founders with benefits such as tax exemption, easier regulatory compliance and financial support, have made it easier to start a business.

Devyani Parameshwar worked in the microfinance and fintech industry in India in 2010 before moving to the UK and Africa. In 2022, she returned to India to start her financial management venture.

“It has changed radically. I remember standing in queues at various ministries in Delhi, trying to get appointments and then get answers, but it wasn’t easy in the past,” she said of her memories of India.

He can now use the online platform to ask questions of the country’s central bank and banking regulator.

It’s easier than ever for foreign companies to invest in India, which means startups have a clearer exit path through acquisitions – something VC investors think hard about before entering new markets or writing checks.

The market is ready for the taking

For Rohan Bhide, who has spent most of his academic and professional life preparing to launch something of his own, a trip home in 2017. while studying in the USA was a turning point.

Indian telecom giant Reliance recently launched a cheap unlimited data plan, which has significantly increased the popularity of the Internet in India. India has been included in the list of countries with the highest number of online transactions.

“That really caught my attention,” said Bhide, who worked at Meta after graduating. “It was a dream come true – a huge market, a huge user base, and at the same time being able to leverage the technology was amazing.”

Bhide returned to India in January, leaving about $580,000 in total compensation on ticketing platform StubHub. He and the co-founder are working to launch a consumer technology product later this year.

Most Indians grew up wanting to work for a multinational company, but that is changing, Bhide said.

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Freelancing, running your own business or working in a startup is much more socially acceptable now because people see the success of other Indian startups. The country has the third largest number of “unicorns” – companies worth at least $1 billion – 64, according to PitchBook.

Boom in entrepreneurial culture

A lot has changed since Hassan first wanted to launch his hardware startup in the early 2000s.

Tech hotspots like Bengaluru and Gurugram have seen a booming entrepreneurial culture over the past few years, with meetups, networking and even morning walks with like-minded builders.

Dhruv Anand, who left Google in the US to return to India in 2021 to launch an artificial intelligence startup, said there are many other founders and mentors who help him run the company.

“If you want to figure out who is the right auditor to talk to and who is the right lawyer to help you draw up your contracts, it’s all very easy,” Anand said.

“It was a really supportive community,” Bhide said. There are people who “tell you about their whole life just because they want to help you and hope you will pass on the favor to the next person who moves to India and wants to start their own business.”

Not everything is perfect

Even though these founders have made the decision to return to India, that doesn’t mean they no longer see the benefits of operating in the US.

Ruchit Garg founded an agricultural startup in Silicon Valley in 2016 with the goal of supporting farmers around the world. In 2019, he returned to India, where his late grandfather worked as a farmer.

Garg has since expanded operations in India, but says the startup ecosystem there is not yet able to compete with Valley’s decades of experience.

“In Silicon Valley, the whole ecosystem was more mature. It is still one of the best places for entrepreneurs. India is not there yet, although it is developing quite dramatically,” he said.

Despite efforts to digitize key processes, many bureaucratic challenges remain.

For most founders who lived in American cities where the population is a fraction of those in Mumbai and Bangalore, congested roads and poorer air quality are also daily annoyances.

But India provides several big benefits, including affordable domestic help and attractiveness building solutions to problems they witness first-hand.

“It’s a completely different joy to be able to solve problems that you feel very personally,” said Parameshwar, a fintech founder. When she was working in Africa, she needed translators. Now she can talk to her users herself.

Bhide said the overall sentiment among local founders is shifting from “Build with India” to “Build for India.”

For some founders, another advantage was the family environment and culture in which they grew up.

Niranjan Vemulkar returned to India in 2015 and later founded a digital heritage planning platform.

He said he never felt completely at home in the US, where he lived for over a decade.

“For us, it was the fact that we wanted to raise our family in an environment where children would have access to their grandparents and Indian culture,” Vemulkar said. “The fact that you could come back to India, start something of your own and find a solution in an ecosystem that was potentially growing for startups was just icing on the cake.”

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