To answer you question, being a former H1B myself.
You are in valid h1b status because you are working. Your employer however has violated the H1B statutes and Labor statutes by not paying you. At some point after not getting paid, and particularly finding out your company is out of funds, USCIS can reasonably infer that you were no longer employed/out of ...
Incorporate back home (in India) and treat every sale of a product as
and export from India and import into US
No, you cannot do it while you're on H1b. You'd be breaking the law. Working for an employer other than your petitioner, even if it is yourself, is illegal.
Move to Chile or Canada which have much simpler immigration policies
for startups .
First, moving abroad is tightly related to visa. This may limit your options very quickly, because unless you have relatives abroad, the main remaining option is to get a work visa, so you have to get sponsored by a company willing to hire you.
With that said, south east Asian could be a good choice indeed. Taiwan and Singapore would be my first choices. ...