Why India’s Billion Dollar Startups Are Coming Home

Over the past decade, many of India’s most successful startups chose to incorporate abroad, primarily in financial hubs like Singapore, the United States, and the Cayman Islands. However, 2025 is witnessing a profound shift—many of these startups are now returning to India. Companies like Meesho, Zepto, Pine Labs, and Razorpay are leading this trend, driven by a mix of regulatory changes, a robust public market, and an evolving venture capital ecosystem that now makes India a more attractive base for high-growth startups.

This reversal is largely due to the increasing attractiveness of India’s public markets. IPO activity in India has surged, with 2024 witnessing a seven-fold increase in IPO exit value, signalling growing investor confidence in domestic listings. Several startups that previously considered listing abroad are now seeing strong valuations on Indian stock exchanges, making a local listing more desirable. The regulatory landscape has also played a role in facilitating this shift. The removal of the NCLT approval requirement has significantly streamlined the process of re-domiciling to India, reducing the timeline from 12–18 months to just 3–4 months. This has removed one of the biggest administrative hurdles that startups faced in shifting their legal base back to India.

Beyond regulatory reforms and market strength, venture capital investors in India have evolved, providing the kind of growth-stage capital that was once primarily available in global markets. With more large-scale institutional capital and late-stage funding options available domestically, startups no longer need to look overseas for expansion funding. The growing pool of domestic institutional investors—including sovereign wealth funds, pension funds, and large private equity players—has ensured that startups can raise substantial late-stage funding without having to incorporate overseas for better capital access.

Another key factor is taxation. The reduction in long-term capital gains (LTCG) tax on unlisted shares, from 20% to 12.5%, has made it more attractive for companies and investors to operate within India. Previously, founders and investors favored overseas incorporation to optimize tax efficiencies, but with this change, retaining operations and fundraising structures within India is now a more viable and beneficial option. The increase in foreign direct investment (FDI) and simplified foreign venture capital investor (FVCI) registration have also contributed to making India an attractive investment hub.

As more high-growth startups move their headquarters back to India, pre-IPO investments, secondary transactions, and late-stage venture funding opportunities are expected to expand. Companies shifting their domicile back to India are also better positioned to benefit from local regulatory incentives, government-backed startup initiatives, and institutional investor interest.

The increasing trend of Indian startups re-domiciling is not just a short-term adjustment but an indicator of a broader structural shift. With regulatory frameworks becoming more supportive, access to domestic capital improving, and India’s IPO market gaining strength, it is likely that more startups will choose to stay within India from their early growth stages. This shift is helping India cement its position as a long-term startup and venture capital powerhouse.

Source: Bain India Venture Capital Report 2025

Frequently Asked Questions