Recently, I came across a particularly interesting statistic. According to Hurun’s Global Unicorn Index 2026, Indians have co-founded 217 unicorns globally (startups valued at more than $1 billion). Of these, 142 are based in the United States. In contrast, nearly 400 unicorns were co-founded by Chinese, of which just under 50 were outside China.
The most commonly cited explanation is financial opportunity. There is undoubtedly truth to this. My first job after college in India paid approximately $6,000 a year. A few years later, I moved to a unicorn startup, where my compensation increased to around $30,000. Today, just two years later, working in the Bay Area, it is roughly 8-10 times higher.
The economics are compelling. But this alone cannot explain the difference. International students from many countries have access to similar opportunities in the US, yet Indian founders appear particularly likely to build abroad.
To understand the reason behind this, I turned to an HBS classmate who returned to China after graduating. Here is what I learned.
The pull of home
China has numerous initiatives, programmes and subsidies designed to attract ‘sea turtles’, Chinese nationals who return to the mainland after studying or working abroad. While these policies explain the mechanism of return, they don’t fully account for the underlying desire to do so.
One important factor is national pride.
Modern Chinese history places significant emphasis on the ‘Century of Humiliation’, the period during which China experienced territorial concessions and loss of sovereignty. This history has been reinforced through books, movies, and TV shows. Now, the message is of the “Great Rejuvenation Of The Chinese Nation”, a slogan used by the Chinese Communist Party to restore China to a position of global strength.
This creates an interesting contrast with India.
A 2021 Pew Research Center report, Religion in India: Tolerance and Segregation, found that 96% of Indian adults said they were “very proud” to be Indian. Almost 95% of Indians also said they are proud to be residents of their state.
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So is there a difference in patriotism in the two countries? The answer lies in where the power is concentrated.
In India, states have significant political and economic autonomy. As a result, Indians often feel strongly attached not just to the country, but to their individual states.
China, by contrast, combines a strong central government with considerable administrative capacity at provincial and local levels. This allows it to be effective at leveraging its capacity to build institutions.
But this raises a broader question: how did two countries with similarly long civilisational histories, and both emerging from the shadow of colonialism, develop such different economic models?
Language and demographics
One key reason may be language.
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Because of Britain’s historical influence, English became deeply embedded in India’s education system. This has given generations of Indians an advantage in working, studying, and building businesses in English-speaking markets. In contrast, less than 1% of the Chinese population is comfortable conducting business in English.
India’s linguistic diversity is also a key factor. Around 80% of Indians identify as Hindu, but religious identity doesn’t translate into cultural uniformity. India is home to hundreds of languages and dialects. Language, customs, and regional identities vary across the country. In China, however, that figure is just 13%, representing a far more homogeneous population.
Domestic market
The next factor is open markets.
By 1956, China had completed its socialist transformation of the domestic economy. During the Cultural Revolution, the efficacy of such policies came into question. By 1980, China had legalised individual entrepreneurship and launched policies for techno-economic growth.
In 2000, when internet technologies began proliferating, Google entered China. When it exited the market in 2010 after a dispute involving censorship and cyberattacks, companies such as Baidu had already developed into major local players. The same pattern can be seen across China’s technology ecosystem. The Great Firewall of China created a sizable domestic market in need of homegrown companies, with a government looking to fund and support these endeavours.
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In contrast, the Indian domestic market is a fraction of the Chinese domestic market, and Indian companies have had to compete with multinational companies.
The Economist’s Crony Capitalism Index, which tracks billionaire wealth generated from heavily regulated, “rent-heavy” sectors like real estate, mining, infrastructure, and defence, ranks India significantly higher than China.
The EV industry
The electric-vehicle (EV) industry is an example of the difference.
Tesla was built in the US, where capital, talent, and market were available. It became the first American automobile company to go public since Ford in 1956, and went on to dominate the EV market until late 2025. A large part of Tesla’s scale comes from its fully owned China operations, set up in 2019.
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China’s EV industry developed through joint ventures, contract manufacturing, and supplying manufactured goods to Western companies. With the resultant tech transfer, local companies became competitive. BYD is now the largest EV manufacturer in the world.
Now, what makes this even more relevant is that both BYD and Tesla are subject to an import duty of 110% in India. Historically, India’s high import duties on automobiles have protected domestic manufacturers. But there is a trade-off. Too much protection can reduce competitive pressure.
The battery industry is an example.
China accounts for more than 85% of India’s lithium-ion battery imports. The latest example is a joint venture between JSW and Morrison Garages, a British brand owned by SAIC, a majority Chinese state-owned enterprise. Clearly, these measures have not kept the Chinese out of the Indian EV market and have perhaps stifled competition that can have positive second-order effects on the economy.
Family structure
China’s one-child policy created a generation in which many families had a 4-2-1 structure: four grandparents, two parents, and one child. This created a family responsibility for only children as their parents and grandparents aged.
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India’s demographic structure has been different. For many Indian families, having siblings means that responsibility for parents can be shared across the family. This can make it easier for one sibling to move abroad while another remains closer to home.
This, however, not universal. Indian families are changing rapidly, and the decision to move abroad is influenced by much more than family structure.
So, put together, what does this really mean?
A Chinese student returning from abroad may find a huge domestic market, government support, and an intrinsic desire to return due to national pride, cultural causes, and personal reasons.
For an Indian who doesn’t have a large family business, the numeric or logical decision is to work and build abroad. However, no place will ever feel as welcoming as home. The question is, which do you value?
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Note: The author has worked at both the Mahindra Group and Tesla. The views expressed are his own and do not reflect those of either company.
