The Indian taxpayer funds the IITs, NITs and IIMs at a fraction of their true cost. The returns of that investment, in patents, start-ups, tax revenue and research, often accrue to California, Washington State and Massachusetts. India trains world-class engineers, and the world’s richest economy hires them. This is, in effect, a subsidy from Indian citizens to American innovation, writes former IAS officer V.S.Pandey.
Every few years, a remark from an American leader or a tightening of H-1B rules sends a wave of anxiety through Indian households. Engineers who have spent a decade abroad wonder whether they are welcome, and families back home wonder what it all means. The latest episode, in which the US Vice President’s comments on “indentured” workers have been read as a slight against Indian professionals, should be the last such wake-up call. India needs to ask itself why its best minds are so exposed to another country’s moods.
The uncomfortable answer is that we built the exposure ourselves. For three decades, India has treated the American job offer as the ultimate certificate of success. IIT campuses celebrate dollar-denominated placements. Families measure achievement by a green card. Governments, meanwhile, have taken comfort in the idea that a successful diaspora is a form of national influence. It is not a worthless idea, but it is a dangerous one when it becomes a substitute for building capacity at home.
A subsidy we never meant to give: The Indian taxpayer funds the IITs, NITs and IIMs at a fraction of their true cost. The returns of that investment, in patents, start-ups, tax revenue and research, often accrue to California, Washington State and Massachusetts. India trains world-class engineers, and the world’s richest economy hires them. This is, in effect, a subsidy from Indian citizens to American innovation.
Remittances, which run well above $100 billion a year, are real and welcome. But they are consumption money. They buy flats and weddings. They do not build semiconductor fabs, foundation models, jet engines or drug-discovery pipelines. A country does not become a technology power by exporting talent and importing cheques.
Influence abroad is not strength at home: India’s leaders often point to Indian-origin CEOs and scientists as proof of national clout. But these individuals serve American shareholders and American institutions, as they should. Their success is a credit to them, and to the Indian education that shaped them, but it does not give New Delhi leverage. The recent episodes show exactly this: when American politics turns inward, a visa holder’s career can hinge on a rule change or a speech, and no amount of diaspora prestige offers protection.
The precedents are instructive: Others have walked this road. Taiwan’s semiconductor industry took off when Morris Chang returned from the United States to found TSMC. South Korea built its research base by luring back scientists with funding, autonomy and respect. China ran sustained recruitment programmes for overseas researchers and backed them with labs and capital. Israel built a start-up ecosystem partly on returning veterans and academics. None of these countries relied on sentiment. They created conditions in which returning made sense.
India is no longer the country people left: The old excuse that there is nothing to return to is weakening. India has a large domestic market, a deep pool of venture capital, world-leading digital public infrastructure in UPI and Aadhaar, and a government that has finally put semiconductors, AI, space and defence manufacturing on its priority list. Global firms have set up large capability centres in Bengaluru, Hyderabad and Pune. What India lacks is not ambition but a critical mass of seasoned people who have run big labs, scaled products and managed complex programmes. Many of them are currently in the United States.
What would make people come home: An emotional appeal to return will not work, and it should not. Professionals will respond to opportunity, not to guilt. The state must therefore do the harder work:
- Fund research at salaries and with autonomy that rival global institutions, with long-term grants free from bureaucratic delay.
- Offer returnees tax relief, simple relocation, and quick regulatory clearances for new ventures.
- Use public procurement to guarantee early customers for deep-tech start-ups in defence, health and energy.
- Fix the link between academia and industry so that a lab discovery can reach the market within years, not decades.
- Treat the IITs as national research engines, not placement agencies for foreign employers.
It would be foolish to pretend that cutting ties with the United States is either possible or wise. American universities, capital and collaboration remain valuable to India, and many economists argue that the movement of talent can, over time, benefit both sides through investment and networks. Individuals also have every right to seek better opportunities, and no nation can or should confine its citizens.
But there is a difference between a diaspora that is a choice and one that is a dependency. When a single policy change can unsettle lakhs of Indian careers, it is a sign that the balance has tilted too far.
The humiliation of the moment is not, in the end, about one remark or one visa category. It is a reminder that respect abroad follows strength at home. India’s best response is not anger but construction: laboratories, factories, institutions and a culture that values its scientists and engineers enough to keep them. If the next generation of Indians can build their careers at home, no foreign politician’s words will ever sting quite so much.
(Vijay Shankar Pandey is former Secretary Government of India)
