In recent years, a significant number of developing nations have made moves to institutionalize their relationships with their transnational communities. This has occurred in a variety of ways: through new ministries for "diaspora affairs," through the granting of dual citizenship, the extension of voting rights to immigrants, and even through the creation of reserved seats in national legislatures. Such gestures re-conceive diasporas as being part of a larger "global nation," with all of the concomitant claims on institutional structures of the state. This marks a break from the past, when immigrants were ignored or denounced as traitors by their home state. It also marks the rise of what the author terms the "domestic abroad," or the reassertion of nationalist imaginary and state authority amid neo-liberal restructuring of states.

Latha Varadarajan argues that studies in transnationalism have heretofore failed to grasp the importance of such phenomena, due to the field's tendency to avoid the question of capitalism and focus on the undermining of state sovereignty and the building of global civil society. In Producing the Domestic Abroad, she proposes a re-consideration of both the meaning of transnationalism and the nature of national and state identity in global politics. In order to do this, Varadarajan draws from two literatures that are rarely brought into conversation with IR scholarship: postcolonial theory and historical-materialism. She develops her argument through an analysis of the post-1947 Indian state and its dynamic relationship to the groups constituted as the "Indian diaspora" especially in the context of the neoliberal restructuring of the Indian economy.