For decades, the United States beckoned as the land of opportunity for bright, young Indians, lured by the prospect of prestigious university degrees followed by jobs on Wall Street or in Silicon Valley.

Indians have since 2001 been the largest foreign student population on American campuses, comprising around 15 percent of all international students at colleges and universities in the United States, according to the U.S. Embassy in New Delhi.

But now, the economic crisis that has sent the U.S. economy into its worst recession in decades, has tarnished the sheen of the 'American Dream' for many Indians who are opting for university studies and career opportunities at home.

America's loss may be India's gain, analysts say, pointing to a 'reverse brain drain' that may see India reaping benefits for years to come as some of its smartest and most talented people put their energies into India' economy, Asia's third-largest.

The brain drain has already begun to reverse. Now there are many magnets pulling the best talent. Before, the U.S. was where everyone wanted to go, said Vivek Wadhwa, a U.S.-based Indian academic who has written a paper on the issue. India's economy has boomed at around 9 percent growth in each of the last three years, lifting millions out of poverty and creating a generation of affluent and ambitious young Indians.

Many have pursued prestigious post-graduate degrees in the U.S. and Europe and then stayed after finding high-paying jobs.

But as the global financial crisis has kicked-in, Indians are seeing greater opportunities at home, where there are more job openings, the cost of living is lower and modern amenities such as shopping malls and condominiums offer them a comfortable life.

About 100,000 skilled Indian 'returnees' will come home from the United States in the next five years, Wadhwa estimated.

When I joined Duke four years ago, nearly every student talked about wanting to stay and work in the U.S., said Wadhwa, an adjunct professor at Duke University and a senior research associate at Harvard Law School.

Now the vast majority plan to go back home. A few want to work here to pay off their loans, but they don't think they will be able to get jobs.

With U.S. unemployment at a 26 year high, prospects at home appear better for Indian graduates as firms such as Warner Bros and IBM announce they will move jobs to India and other outsourcing hubs after laying off workers in North America.

FINANCIAL AID

Rahul Dutta, 23, is a case in point. He has changed his plans to study in the United States and is now enrolled at a local university.

My initial plan was to do my master's degree there and look for a job too, but now I realize that there are no jobs and no funding, so I took admission in a college in Delhi, said Dutta.

In Bangalore, south India's high-tech metropolis, Kripa Chettiar reached the same conclusion.

I was looking at doing a master's in financial engineering at Columbia University, Chettiar said. But now I am not even writing the GRE because now there's no point, as there is no financial aid available at all.

The GRE, or Graduate Record Examination, is the standard admission test for graduate university studies in the United States and several other English-speaking countries.

Garvit Bafna in Pune, a city near India's financial capital Mumbai, took the exam, but he says he will only move to America if he gets into a top-ranked university.

Even students who have passed the GRE exam are abandoning plans to study abroad due to lack of funds, said Rajiv Ganjoo, head of international education at Career Launcher, an educational service provider in India.

It is a waiting game now, Ganjoo said. Students are looking at the recession, at how the colleges react to it and how the government reacts to it, before taking any steps.

For students already in the United States, getting fellowships and other funding is becoming difficult, especially for foreigners as the pool of scholarship dollars has dried up due to shrinking university endowments from stock market losses.

The funding scenario is grim as compared to past years, said Cherry Harika, a 24-year-old from India's Punjab province who is studying for a masters degree at Boston University.

My university has frozen new hiring. There are hardly any new job openings for foreigners, especially when U.S. citizens are losing their jobs.

Employer visa sponsorships are growing scarcer and President Barack Obama's administration is under pressure to restrict the number of temporary work permits issued to foreigners.

About 55,000 students in India took the GRE last year, down more than 20 percent from the year before, said Jaideep Chowdhary, who heads the GRE program at a private training institute in India.

Most students who study in the United States need to shell out around $50,000 for a two-year stay, he said.

Much of that money would come from loans which are not easy to get these days due to the credit crunch, especially for students with no reasonable assurance of a job.

By contrast, studying at the Indian Institutes of Technology in Madras, part of a highly reputed nationwide network of engineering and technology campuses, costs about $1,200 a year.

India too has taken a hit from the financial crisis which has slowed the scorching pace of growth of its IT outsourcing sector. One small advantage of the crisis for India may be the human capital benefits as the brightest stay home, said Wadhwa, who wrote a report titled America's loss is the world's gain.

This is an economic tragedy that significantly increases the chances the next Intel or Cisco Systems will launch outside the U.S., Wadhwa wrote.

(Editing by Megan Goldin)

India Ibm