In recent months, there has been frenzied debate about whether the U.S. government’s unfavorable outlook toward immigration would curtail foreign student enrollments in U.S. universities and scale back overseas talent in American tech companies. Many predicted that these measures would hit candidates of Indian origin the hardest.
India is the source of the largest cohort of international students in the U.S. The world’s most populous country is also by far the largest beneficiary of the H-1B system. Seven out of 10 of all new H-1Bs are granted to applicants born in India. Initial reports seemed to confirm the suspicion that Indians would take the biggest hit.
In October, The New York Times reported that the number of international students arriving in the U.S. in 2025 fell by 19% compared to last year — the largest decline on record outside of the Covid-19 pandemic. But subsequent reporting in The Economist noted that this figure may be misleading. New arrivals were fewer than before because many returning students from the previous term did not leave the U.S. in the first place, concerned that if they left for the summer break, they might not be allowed back in the fall. Indian student enrollments, far from declining, were up 10% over the previous year.
But as is often the case with a purely numerical assessment of facts, these headline numbers may obscure more than they reveal. Many of the people interviewed by Rest of World suggested that when it comes to Indian talent’s access to the U.S. market, there are two contrary trends at play. On the one hand, a fast-growing economy at home has placed an overseas education within the reach of a broader segment of India’s rapidly expanding middle class. At the same time, some of the country’s best graduates are diversifying away from the U.S.
The aggregate numbers mask a bifurcation: While for the average Indian graduate, the allure of America’s universities and companies is still strong, the country’s best minds are more attuned to similar or better options in other countries and, increasingly, in India as well.
“We are getting fewer top drivers who want to do advanced graduate studies,” Karthik Ramani, a professor of mechanical engineering at Purdue University and a visiting professor at Massachusetts Institute of Technology, told Rest of World. “Partly because I think in India you have more consulting jobs, you can do really well after doing an MBA for instance, so the general attractiveness of the U.S. has come down.”
4 India’s rank globally as the recipient of venture dollars.
Ramani graduated from the elite Indian Institute of Technology Madras in 1985. After picking up a doctorate at Stanford University, he spent the better part of the past 35 years in academia in the U.S. While a generation ago, up to a half of his undergraduate class at IIT moved to the U.S., the figure has now dropped to 10%–20%, Ramani told me.
Take Nishant Vasan, who received his undergraduate degree in mechanical engineering in IIT Madras in 2025 — 40 years after Ramani graduated with the same degree from the same school. While Vasan initially thought about following the well-worn path of moving to the U.S. like so many alums before him, his prospective graduate adviser in the U.S. nudged him to look for alternatives elsewhere given, as he put it, the “current situation.”
Vasan ended up taking an offer from automaker Honda Motor Co. in Tokyo, where he works on artificial intelligence and robotics. His decision had next to nothing to do with topical concerns like student visas and H-1Bs, given that Vasan was born in the U.S. and is an American citizen. He decided to move to Japan because he thought the work he did there would be more consequential, he told Rest of World.
“I feel like more avenues have opened up,” he said. “I know seniors in Dubai, I know seniors in Japan, in Singapore. IIT graduates are not just going to the U.S. — there are other alternatives now.”
Vasan said he wouldn’t rule out going back to the U.S. some day. Right now, he is much more preoccupied with the prospect of returning to India.
“I would really like to go back to India and either start something new or contribute to that space in a meaningful way,” he said. It’s a way of thinking that he says is becoming more common among fresh graduates like himself.
It seems like more than half the people in my year have gone back to India, and many are starting companies in India.”
For Vasan and others, it is no longer unthinkable that a globally relevant tech company can be incubated in India. The country has the fifth highest concentration of billion-dollar companies and is the fourth largest recipient of venture dollars globally, according to data from Dealroom, which provides intelligence on startups.
In some respects, building outside the U.S. could be an advantage. At a time when important pockets of the tech industry in the U.S. are being monopolized by a handful of big tech companies, overseas destinations offer upstarts breathing room to work on their ideas outside the kill zones that surround these behemoths.
The AI boom has proven to be different from the internet era in one important respect: We haven’t seen nearly the same degree of cannibalization of old companies by new ones. Many of the biggest names in AI — Nvidia, Google, Meta, Microsoft — are holdovers from previous platform shifts, and have managed to extend their relevance, given the sheer scale of investments needed to train and run AI models, which can make it very hard for new entrants to compete.
Local companies can also work on local problems which foreign firms might find hard to fully comprehend. Vasan cites the example of Sarvam AI, a Bengaluru-based company which is creating an LLM with all the Indian languages and their various dialects — a big challenge, given the lack of data.
The enduring challenge of the Indian tech industry is that it has struggled to turn a vast talent base into successive waves of tech companies.
This openness to exploring India as an option extends to second-generation Indian Americans, too.
“I worked in India for a year, and if not for wanting to do graduate school, I would’ve stayed longer and I could totally see myself going back in the future,” Arjun Ramani told Rest of World. Ramani was born and raised in the U.S. and holds undergraduate and graduate degrees in economics and computer science from Stanford University. He is currently enrolled in a Ph.D. program in economics at MIT.
“At Stanford there were 10 to 15, or maybe even more students from India every year. And in the past, the aspiration was if you came to the U.S. for undergrad you would want to stay,” he said. “But now it seems like more than half the people in my year have gone back to India, and many are starting companies in India.”
The India AI Mission, launched last year with $1.25 billion in funding, aims to catalyze the transformation by providing compute infrastructure and supporting AI innovation hubs across the country. By facilitating access to GPU resources and fostering public-private partnerships, the initiative seeks to create the ecosystem conditions that could turn India’s talent pool into the next generation of AI companies.
The enduring challenge of the Indian tech industry is that it has struggled to turn a vast talent base into successive waves of tech companies. The industry is still dominated by the old guard of Wipro, Infosys, and Tata Consultancy Services, which are all more than half a century old and continue to retain a narrow focus on software services.
Many of the newer startup ecosystems globally got their start with that one breakout success story that proves to the diaspora their startup dreams can be built at home. South Korea’s Coupang, the e-commerce giant founded by Harvard dropout and Korean-American returnee Bom Kim, is one example that comes to mind. A success of that scale might be just what it takes for a country like India to turn a trickle of returning professionals into a broader movement of talent repatriation.