[dhirenb]

Putting "especially Indian startups" makes it confusing but OP means startups in India. Indian startups are typically incorporated in Delaware (or Singapore) instead of India.

There are a variety of reasons:

* Ease of incorporation, getting bank accounts, predictable business laws, etc.

* The majority of the capital going into these startups is coming from outside India (a lot from the US). These investors want a more predictable and well trodden path for their investment and so they too encourage company formation in Delaware.

* After a while things become the norm in startup-land and most companies follow the playbook they've seen being done before.