NEW DELHI | MUMBAI: When Vivek Goyal applied to the Stanford Graduate School of Business in 2010, the IIT-Kharagpur graduate and operations department manager with Procter & Gamble was confident of setting up base in India after completing his MBA. But like several other fellow Indians studying at leading global B-schools, he has dropped his plans of returning this year due to the slackening economy back home and the sharp depreciation in the rupee coupled with the signs of revival in the US.
The investment environment has deteriorated considerably in India since the time he enrolled into the programme, Goyal points out. “Venture capital investments have gone down over the past six months and it makes sense to stick to the Bay Area and gather a network here,” says Goyal, who launched e-commerce venture RentZeal with batchmate Abhishek Poddar three months ago and graduated recently.
His partner and other batchmates share his pessimism, evident in the fact that none of the other eight Indian students in their class of 2013 is planning to shift back home this year.
Last year, four of the seven Indian students at Stanford had returned to India, partly because of the dismal economic situation in the US even as the domestic economy was also on the decline.
“One has to take a substantial hit in pay packets to come and work in India, and it does not make sense to earn in rupees and pay loans in dollar terms,” says Poddar, who has to pay back about $140,000 (around Rs 85 lakh), the average loan amount taken by students for an MBA at Stanford. Data gathered by ET from the alumni networks shows the situation is much the same at Wharton Business School, Harvard Business School and Europe’s top schools such as Insead, with fewer Indian students planning to return to the country after graduation this year. Just three or four of the 45-50 Indian students at Wharton are planning to return to India this year, down from 15-20 of a batch of about 30-35 last year. “Fewer Indian students from my batch are returning to India this year and many of my classmates are staying back in the US. And the few who are coming back are mostly coming back for personal reasons,” says Mukta Darera, who is joining Booz & Company as a consultant in San Francisco, adding that the prospects seem better in the US at present.
India’s GDP growth hit a decadal low of 5% in 2012-13, and a consistently depreciating Indian rupee plunged to an all-time low of 61.21 against the US dollar on Monday.