A notable trend in the Indian tech industry is the resurgence of domestic brands. Companies like Lava, Micromax, BPL, and Onida are experiencing renewed sales and recognition. Lava, holding 1% of the smartphone market, aims to increase its share to 10% within five years.

This "ghar-wapsi" or homecoming, isn't limited to hardware companies. Several Indian startups, including Razorpay, Udaan, Pine Labs, Meesho, and Flipkart are reversing their earlier decisions to set up legal headquarters abroad. Zepto has already completed this transition. This "reverse flipping" is spurred by improved IPO prospects, simpler compliance, and India's robust economic growth.

Several factors contribute to this phenomenon. Recent policy changes have made it easier for foreign-incorporated startups to merge with their Indian entities. The Ministry of Corporate Affairs has eased the process, requiring only Reserve Bank of India (RBI) approval instead of lengthy clearances from the National Company Law Tribunal (NCLT). India's maturing capital market is another compelling reason. A software firm with $50-$60 million in revenue can now list in India, whereas a US listing would require nearly $500 million in revenue. Indian markets offer higher valuations and greater accessibility.

For fintech startups, aligning with domestic regulations by being headquartered locally is logical, as they generate most of their revenue within India and operate under its financial system. The rise of domestic funding options and the impressive performance of Indian tech stocks further incentivize this shift. The belief that startups must list on NASDAQ for high valuations is fading. In 2024, India had 327 companies listing, surpassing the US (183), Europe (125), and China (98).

However, the transition isn't without challenges. Companies need multiple legal and regulatory approvals and must pay significant taxes. For instance, PhonePe paid ₹8,000 crore in taxes to move its registration from Singapore to India. Despite these hurdles, the trend signifies a strengthening domestic market and a preference for local listings among successful ventures.

This resurgence extends to the IT sector, which is undergoing a significant reset. While Indian IT firms have generated substantial free cash flows, experts suggest reinvesting in innovation and global capabilities as AI disrupts traditional models. Strategic investments in computing infrastructure and next-generation companies are crucial for staying competitive. This shift requires balancing innovation with shareholder expectations.