As per a joint research report, as many as 60% of the NRIs have returned to India to explore business opportunities.
Enjoying the perks of not only being the world’s largest democracy but a country with untapped and unlimited growth potential, India is suddenly witnessing a surge in ‘Reverse Brain Drain’ trend. Though no research is currently available to quantify actual number of returnees, it is estimated that thousands of highly educated and skilled people are returning home every year.
A joint research report by the Duke University, University of Berkeley and the Kauffman Foundation for Entrepreneurship in the US proves that as many as 60 per cent of the NRIs have returned to India to explore business opportunities. The report also shows that half of the NRIs have started their own ventures in India and almost 79 per cent NRIs have returned only because of growing demand for their skills in India.
According to latest IMF projection, India is expected to surpass China in terms of growth rate in 2016. The recent economic boom not only resulted in the upliftment of the standard of living but has also created a generation of well educated and ambitious young talent working towards bringing a paradigm shift in country’s economic and business landscape. Having said that, the contribution of NRIs in creating efficient business models and ecosystem in India could no longer be ignored. Sensing the opportunities India’s thriving economy is offering, these NRIs are acting as a driving force towards change.
NRIs Returning to India
“The Indian entrepreneurial ecosystem was the triggering point for my return to India in January 2011,” shares Vikram Upadhyaya, Chief Mentor and Accelerator Evangelist, GHV Accelerator. A Graduate from University of Tokyo, Upadhyaya started his entrepreneurial journey way back in 1999. Besides being a serial entrepreneur, Upadhyaya has a diversified experience in handling Japanese offshore projects to global corporate strategy and specialises in new ventures turnaround.
When asked about his decision to return home, Upadhyaya replies, “It was quite a big decision in my life when I and my family decided to relocate to India from a place where we lived for over 15 years, a city that is described as one of the most safe, developed and prosperous destinations of the world - Tokyo.”
In 2008, when Upadhyaya was trying to establish the TiE - Tokyo chapter along with mentoring and investing in Indian start-ups like Druva, Stayzilla, Merinews, IndiaCollegeSearch etc, he met Kanwal Rekhi, who was also visiting Tokyo along with other TiE - Tokyo Founding Members. Also known as the father of Indian entrepreneurship, Rekhi is an Indian-American businessman, venture capitalist, angel investor and an entrepreneur. He is currently serving as the Managing Director of Inventus Capital Partners.
“Over my three days of interaction with him, I realised that if I wanted to do something impactful for the country and empower entrepreneurs, I will have to be in their ecosystem. In 2011, I finally decided to be a part of the change and committed myself towards working to empower the Indian entrepreneurial and start-up ecosystem,” asserts Upadhyaya.
Through Green House Ventures (GHV), Upadhyaya looks to close investments in 10 promising startups from India every year. He plans to put $100K against 20 per cent equity in each startup and complete the acceleration programme, which will help startups close Series A and go global.
Similarly, Chennapa Naidu Darapaneni, a 40 year old first generation serial entrepreneur, moved to US soon after completing his engineering from JNTU-Ananthapur. He started his career as a Software Engineer and after working in various roles, he founded Versant Technologies Inc in the year 2000 in US. Subsequently, Darapaneni expanded its operations in India in 2004.
“After spending 10 years in the US, I felt India has much more potential for the growth in the long run. While this is the first and foremost motivating factor, we also thought from a family point of view that our children should grow in India with our culture at the core,” says Darapaneni, Founder and CEO, Versant Online Solutions Pvt. Ltd.
Meanwhile, on returning to India in 2007, he launched MeraEvents.com to address the grave issues faced by the event industry in India. His other brain child event technology solutions include – EasyTag, Digibroc, MoozUp, and Venues.MeraEvents.com.
Today, MeraEvents has emerged as a one-stop solution for the events and trade fair industry (promotion, ticketing and event listing) in India. Under Darapaneni’s able leadership, MeraEvents recently raised $1 million in funding from OMICS international.
Tech enthusiast Deepak Gagneja started its first technology product company Shrishti in the year 1996. At that point of time, he found very hard to sell CRM software to enterprises in India. Whereas, similar companies like Siebel and Peoplesoft in more developed countries was gaining success in the CRM space. In 1999, when Bharti Airtel acquired Shrishti's IP, Gagneja decided to move to Silicon Valley to learn how technology companies operate in mature markets.
In Silicon Valley, Gagneja worked in various renowned enterprise software companies like Kabira and Oracle. After gaining rich experience, he kick started his new venture Lecorpio in the year 2006. The firm soon became a leading IP management software company and served clients like Apple, Google, Amazon and several other Fortune 500 companies. Later in the year 2012, Lecorpio got acquired by a US-based private equity firm.
During his tenure of 15 years in the Silicon Valley, Gagneja saw various technological innovations happening in the healthcare space, especially in Europe and US. After returning to India in August 2013, he decided to launch his own venture in the healthcare technology space, and eventually started MorningPlum Healthcare Pvt. Ltd. in the early 2014.
Expressing his thoughts on the same, Gagneja narrates, “After spending a decade in Silicon Valley, it became clear to me that technology has the potential to impact every industry and every person on the planet. And for me, there was no place better than my home country to witness this change.”
Gurgaon-headquartered MorningPlum provides patients with convenient, high quality and affordable access to highly skilled doctors, nurses and healthcare services in more than 100 locations. "With increasing prosperity, consumers want good health, they are more open to new ideas and are ready to pay for value. Widespread mobile adoption makes it easier to connect with consumers in multiple ways and treat them at reduced costs," says Gagneja.
Ease of doing business
Experts echo the fact that though doing business in India has become relatively easier as compared to mid 90s, India still has a long way to go considering the fact that the government is encouraging and supporting entrepreneurship in a big way.
In Upadhyaya’s words, “Doing business in India is relatively easier now than it was when I moved out of India in the mid-90s. From registering a company to filing a tax return or from hiring a team to selling the company, it has become quite easy now. However, there is a scope for improvement. When we compare the same with the developed countries like Singapore or Japan, registering a private limited company is a day's job there, but in India, it still requires more than 2 weeks!.”
Though the government is trying to liberalise the conditions over the years, but still a lot needs to be done to bring India on par with other best ecosystems in the world. Speaking on the same lines, Darapaneni shares, “India supports large enterprises. In order to emerge as one of the best ecosystems of the world, the government must encourage a favourable atmosphere for small and medium enterprises.”
Gagneja, on the other hand, believes that doing business in India has become easier on the consumer front than on the government side. He explains, “When it comes to customer acquisition, the business environment has become easier. The recent success of e-commerce companies indicate that the market size is growing and it is easier to reach consumers directly today. On the government side, we need more proof on the ground.”
Various government initiatives such as ‘Billion$Babies’, ‘10,000 startups’, ‘Make in India’ have been undertaken to boost the startup ecosystem and entrepreneurial spirit in India. But the success of these initiatives depends on how favourable the policies are for startups.
Experts are of the view that Company law; Registrar of Companies and its treatment towards startups; Taxation for startups and investors; Ease of registering a company; Access to seed capital and its terms; and Subsidising incubators are some of the areas where policy makers need to look at. Also, a high level of transparency and reliability is required in business, economic and regulatory affairs.
“India should be seen as a startup friendly nation. To encourage entrepreneurship, both State and Central governments should allocate funding for cash grants, debt financing, incubators and tax incentives,” points Gagneja.
Difference in business approach
Indian market dynamics are quite different from the rest of the world, which can be categorised under three Ps - People, Process and Paycheques. “The business approach is very different in India because a lot of vulnerabilities are associated with the standards as these are not followed strictly or even adhered to, unlike other developed countries. Moreover, the regional challenges also pose hurdles and hinder business environment,” explains Upadhyaya.
Further, lack of funding is one of the biggest stumbling blocks for startups. With more financing options, this risk can be mitigated to some extent. Sharing his views on the same, Gagneja says, “A vibrant ecosystem promotes experiment, which is the key to success for entrepreneurship, where the probabilities of success are low and extremely skewed.”
Also, the present finance and credit ecosystem in India is not at all favourable for the budding entrepreneurs. Expressing his thoughts on the same, Darapaneni says, “The financing and credit ecosystem in India doesn't support any company, which is not profitable and has not completed its three years of existence. This creates hurdles for budding entrepreneurs as it takes much longer time to become profitable.”
Today, an entrepreneur needs to operate in a globally-competitive environment. Hence, the government should create a competitive advantage for entrepreneurs, startups and SMEs in India for things to change for better. Sharing his final thoughts, Upadhaya indicates that all entrepreneurs must adhere to the T.E.S.T. concept (Team, Execution, Scalability, and Technology) in order to build globally competitive and sustainable products.
India in post globalisation is welcoming NRIs as they have global exposure that can be translated into innovative ideas. NRIs have got the best of both the worlds – education, work possibilities, exposure, and a skill-set which both complement the working environment here and fill the growing demand of such individuals. We salute NRIs who are taking positive initiatives towards building a strong startup ecosystem in India. In future, we are hopeful that the new government will further ease the business environment in India.
With inputs from Swadha Mishra