The young entrepreneurs heading back to Indian homeland

By Rajini Vaidyanathan
BBC News, Mumbai

  • Published

As India's economy grows, tens of thousands of young Indians who have studied overseas are heading back to their homeland, drawn by rising living standards. It's a phenomenon known as the reverse brain drain.

"There were many people who thought I was stupid for not settling there and having a house in the suburbs," says Janki Shah as she reflects on her decision to move back to India from the United States.

But for Janki the lure of picket fences and neatly manicured lawns wasn't enough to keep her in America.

Like many Indians, Janki left India to study overseas, hoping to gain a broader world view and a good education. She studied design in Atlanta, then worked in New York, before returning to India to start her own camping company.

"India is a very exciting market, and right now is a great time to come back to India to start something on your own," she says.

'Untapped market'

Two years ago, Janki and her husband set up Big Red Tent, a company that runs weekends in the Indian countryside, and hopes to broaden the appeal of camping in India, where it is still not that common.

The economic downturn in the United States and a sense that India was "more conducive" to new business ideas was what drove them to start up a company back home.

"If we were in the States we'd be one of many camping companies in a saturated market, whereas here we have the space and support to start up.

"India is a fantastic untapped market, open to experimental and innovative ideas, and the middle classes now have the money and are willing to try new things," says Janki.

Cultural affinity and family ties have often been reasons why Indians return home after studying. But the business potential that India offers right now, makes it an even more attractive prospect says Avdesh Mittal, a partner at the Mumbai branch of international headhunters Heidrick and Struggles.

"The kind of funding that is now available here in India was not available in the past. It used to be Silicon Valley typically where the young graduates could find the money to make their startups, but now with the economic environment and the future so bright, there are more and more people willing to give these guys the money."

'Creating affluence'

Mr Mittal says his company has also seen a rise in the numbers of mid-career professionals returning home, attracted by a higher standard of living.

"India is now seen as a marketplace which people want to capture, not just as a destination which people use to lower their pricing.

"It is a place where professionals can drive revenue into the marketplace, and in turn it is creating affluence and improving the quality of life," he says.

A recent study from the Kaufman entrepreneurship foundation in the United States spoke to Indian and Chinese professionals who had been educated in America.

It found that the availability of economic opportunities, particularly when it came to starting up businesses, as well as pride in contributing to the home country's economic development were the main reasons why people were returning. The same report estimated that tens of thousands were now coming back each year.

Weak infrastructure

It is a stark contrast to a study conducted in the 1960s of Indian students who had left for America.

India's weak infrastructure, corruption and red tape were all cited as reasons why the 6,000 students studying in America back then did not want to return to their homeland, according to the 1964 study by Mehdi Kizilbash for the Comparative Education Review.

Image caption,
Mayank Sekhsaria (r) left a job at Google to return to India and start a business with friends

The return of highly skilled and educated graduates might be seen as a boost for India, but it is also a concern to America. Some 52% of Silicon Valley's startups were founded by immigrants, according to research conducted by researchers from Harvard and Duke universities, and retaining this kind of brainpower is a priority for President Obama.

In a recent speech in El Paso, Texas, Mr Obama said visa regulations needed to be examined.

"Today, we provide students from around the world with visas to get engineering and computer science degrees at our top universities.

"But then our laws discourage them from using those skills to start a business or a new industry here in the United States.  Instead of training entrepreneurs to stay here, we train them to create jobs for our competition."

"We don't want the next Intel or the next Google to be created in China or India. We want those companies and jobs to take root here," said Mr Obama.

At present, the most common way for an Indian student to stay past their university education is to apply for a H1B visa, which requires a company to sponsor the applicant. For Janki and others in her position, there was no easy mechanism to stay in America to become a full-time entrepreneur.

There are calls for the legislation to be reviewed to prevent a rise in the so-called reverse brain drain. Senator John Kerry is one of the names backing a Start Up Act in the US Congress, which would allow visas to be issued to budding entrepreneurs.

American Dream, Indian reality

Mayank Sekhsaria's story is one lawmakers such as Mr Kerry do not want to see repeated.

He left a job at Google in America to return to India and start a business with friends.

His company, Greenlight Planet, aims to bring light and power to India's villages through the sale of solar power lamps. Mr Sekhsaria, who is 26, says the opportunity to return and do something with a social cause was doubly rewarding.

"I've always seen a tremendous opportunity and ability to make a change. This was limited for the generation before but the whole start up culture is developing here, and that's exciting."

But while many Indians are choosing to return home, Mayanj believes they will still seek to study abroad first, to gain a broad world view and a good education.

"The Indian education system has a lot to be done," he says, "We are still going to see people go abroad and get that global perspective and come back."

With India's economic might rising, it is likely that the numbers attracted back home will rise, and that the so-called American Dream will become more of an Indian reality.