View: Returnee entrepreneurs are reshaping India’s future, but barriers must be removed to reap rewards

America’s flawed immigration policies have damaged its own competitiveness by locking out the very immigrants who built its economic and technological dominance. These policies have unwittingly gifted India its most valuable resource: talent.By failing to retain the best and brightest – especially from India – the US has triggered a reverse brain drain that is transforming India into a global innovation powerhouse, while eroding America’s leadership in innovation and entrepreneurship. This transformation is exemplified by Indian entrepreneurs who returned from abroad to build billion-dollar companies. Sachin and Binny Bansal, former Amazon employees, co-founded Flipkart. Bhavish Aggarwal, after working at Microsoft, created Ola, which has since expanded into EVs, AI and RE. Naveen Tewari, a Harvard Business School graduate, launched InMobi, a pioneering mobile advertising platform.

It is more than America. Deepinder Goyal, after working at Bain & Company in Singapore, founded Zomato. These returnees didn’t just build companies. They also created ecosystems, driving innovation, generating jobs and redefining India’s role in the global economy.

In 2009, along with Berkeley’s AnnaLee Saxenian, Harvard’s Richard Freeman, and Duke University’s Gary Gereffi and Alex Salkever, I co-authored ‘America’s Loss is the World’s Gain’. This study revealed how restrictive visa policies and limited professional opportunities were driving Indian and Chinese professionals back to their home countries.

In 2011, in the study ‘The Grass is Indeed Greener in India and China for Returnee Entrepreneurs’, Duke’s Sonali Jain, Saxenian, Gereffi, Harvard’s Huiyao Wang and I explored how these returnees were reshaping industries, starting businesses and bringing a global perspective to local problems. These highly skilled professionals, equipped with advanced degrees, global networks and years of experience, are revolutionising innovation and spurring economic growth.

Bengaluru’s Indian Institute of Science’s (IISc) M H Bala Subrahmanya, along with Canada’s University of the Fraser Valley’s Jon Thomas, IISc’s K Ganesaraman and MS Ramaiah University of Applied Sciences’ Sharath Kumar, have now provided qualitative insights into this phenomenon. The recent study surveyed 54 returnee entrepreneurs and 55 domestic entrepreneurs in Bengaluru’s tech ecosystem, alongside 53 key stakeholders, including government officials, incubator heads, venture capitalists and industry leaders.The findings offer a nuanced understanding of the strengths, challenges and impacts of returnee entrepreneurs. The returnees studied were professionals who had spent an average of six years in developed countries, acquiring education, work experience and international networks. Many brought cutting-edge skills from companies and institutions at the forefront of technological and business innovation.This background gave them distinctive advantages over their domestic counterparts: superior technological expertise, extensive international social networks and greater financial resources. These factors enabled them to identify entrepreneurial opportunities more effectively and introduce ‘radically innovative’ products – solutions that are entirely new to the world. Such innovations have been transformative, especially in sectors like AI, clean energy, biotechnology and advanced manufacturing, creating ripple effects that drive broader economic development.

Despite their strengths, Subrahmanya et al’s research highlights significant challenges. Many returnees grapple with what the study describes as the ‘liability of foreignness’, stemming from their extended absence from local markets. They often lack familiarity with cultural and institutional norms, have limited domestic networks, and struggle to navigate India’s notorious bureaucratic and infrastructural hurdles.

These barriers are exacerbated by the fact that over 48% of returnees surveyed were novice entrepreneurs, compared to just 34% of their domestic counterparts. While their ability to identify opportunities is unparalleled, these challenges hinder their capacity to exploit them effectively.

The findings also reveal critical differences in timelines. Returnees take longer to launch their startups due to their initial adjustment challenges. But they stabilise and scale their ventures faster once established. This reflects their capacity to combine international expertise with local resources effectively.

The stakeholders surveyed in the study emphasised that the presence of a robust and supportive entrepreneurial ecosystem is critical. Without it, even the most talented returnees risk failing to realise their full potential.

The implications of this research are profound. With the largest diaspora globally – more than 35 mn Indians living abroad – India has unparalleled potential to attract returning talent. Yet, to maximise this potential, the country must address systemic challenges.

Subrahmanya says there is an urgent need for targeted interventions, such as establishing dedicated returnee facilitation cells to help them navigate bureaucratic processes, providing financial and technical support through grants and incubators, and fostering greater integration into domestic networks. Policymakers must also invest in infrastructure and streamline regulations to create a more business-friendly environment.

For returnees, overcoming the ‘liability of foreignness’ often hinges on their ability to leverage both international and domestic social capital. Many successful returnees in the study collaborated with local co-founders, or partnered with established domestic firms, to bridge knowledge gaps and tap into local networks. By combining global experience with local expertise, these entrepreneurs not only overcome initial hurdles, but also set themselves apart by introducing innovative, world-class products.

The stories of these returnees surely underscore a vital truth: India’s greatest strength lies in its ability to welcome back its diaspora, and turn their ambitions into engines of national progress. As the world watches, India has an unprecedented opportunity to redefine what it means to be a global innovation powerhouse. The future is being built now. And it is unmistakably Indian.

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