The change is not simple, companies requiring several legal and regulatory approvals and the payment of significant taxes. However, the capital market in India matures provides an imperative reason for startups to return. Alok Bathija, partner at ACCEL, said that if a software company with $ 60 million in income can now list in India, a similar list in the United States would require nearly $ 500 million in revenues. Indian markets offering higher assessments and more accessibility, more startups choose to move. Many of these companies generate most of their income in India and operate in its financial system, which makes sense to align themselves with national regulations. Amit Nawka, PWC partner, stressed that fintechs play a crucial role in the financial landscape of India and benefit from a local seat. “Regarding fintechs, as they become larger and contribute to the financial system of India, it should be based here, and this also gives regulators a feeling of comfort,” he said.
Another major factor behind change is the rise of domestic financing options. Earlier, startups based abroad had easier access to global investors, in particular venture capital companies based in the United States. But it is no longer a necessity. Siddarth Pai, co-president of the Indian Venture and Alternate Capital Association (IVCA), underlined how family offices and domestic venture capital funds now fill the gap. “Not only do startups related to the IPO, but a multitude of other startups seek to return to India, in particular to those of regulated areas. It becomes easier for a company to plan its expansion and obtain approvals for the creation of new companies if his parent company is regulated by RBI or SEBI, “he said. The abolition of the Angel tax has still encouraged many startups to change their base to India.
Industry estimates suggest that more than 70 startups are currently moving their head office to India, including at least 20 major players in the ecosystem. However, around 500 Indian startups are still domiciled abroad, mainly in the United States and Singapore. One of the most publicized companies to come back was a phonepe, which paid 8,000 drivers of taxes in taxes to move its Singapore recording in India. Phone The co-founder and CEO, Sameer Nigam, said that for a highly regulated company like theirs, the decision was clear. “India is the place where we started, India is the place where we are focused and India is the place where we will stay for decades,” he said.
The Indian government has taken measures to rationalize the startup process that seeks to go back. Previously, a startup abroad merging with his Indian arm required the authorization of the Court of National Societies (NCLT), a long procedure. Now, only the government and RBI approvals are necessary, which makes the transition faster.
At the same time, the gathering in the actions of Indian technology has dissipated the conviction that startups must list on the NASDAQ to obtain high assessments. “India is one of the most robust IPO markets in the world. In the past year only, India had the greatest number of IPOs worldwide and the second value of the United States, “said Varun Malhotra, partner at Quona Capital. In 2024, India saw 327 companies, against 183 in the United States, 125 in Europe and 98 in China.
For startups like Razorpay, the return to India was an obvious choice. The company pays more than $ 100 million in the transition, but the CEO and co-founder Harshil Mathur thinks that it is a valid investment. “The process of becoming a public in India is much more rationalized today, which makes it a natural choice for startups like ours to grow and prosper in one of the most dynamic economies in the world. For Razorpay, the reverse reversal aligns us closer to our main market. India understands what Razorpay does, and it is logical that we are listed on the market where people know us, “he said.
India emerging as a global start -up center, the trend should speed up. Sunil Khaitan, head of the Goldman Sachs India funding group, expects this momentum to take in 2025, further strengthening India as a key director of world entrepreneurship. As regulatory reforms continue and interior investment options develop, the era of Indian startups incorporating abroad could soon belong to the past.
(With entries you)