Foreign Universities in India: Who’s Coming and Why?

My article was published in Financial Express on the primary motives of foreign universities interested in India and their influence on key Indian higher education trends. Given below is the article which is also available here.

While the Foreign Educational Institutions Bill is still awaiting discussions in Parliament, there is continued interest and curiosity about which foreign universities will come to India and how will the Bill influence Indian higher education?

Over the last decade, Indian higher education has witnessed three primary trends—growth of private institutions, increasing demand for professional education and widening regional disparity. These three trends will become stronger with the introduction of the Bill and more foreign universities with profit/revenue motives are expected to establish campuses in India.

Motives of foreign universities

Global higher education systems are diverse and within each system there are a wide range of institutions with varying missions and quality. However, there are two primary motives for institutions seeking to enter India—prestige or profit/revenue. Between these two extremes, there are many foreign institutions with a different mix of prestige and profit motives.

Building universities of excellence is a time-taking and incremental process. Once an institution has achieved a certain level of reputation, maintaining it at that level is quite a challenge. Thus, even the best universities are in constant quest to access indicators of prestige like knowledge, research and talent. This access directly translates into competitiveness for rankings, which strongly emphasise on internationalisation and research output. For example, Harvard and Yale are in the prestige-enhancing group and have categorically said that they will not offer degree programmes in India and hence their approach is to engage with knowledge creation and dissemination through non-degree partnerships and programmes.

At the other extreme, there are universities that seek profit/revenue and see India as a market with huge growth potential. Especially for public universities, this opportunity comes at a time when they are facing severe budget cuts from government and are hard-pressed to seek additional sources of revenue. Technically, not-for-profit public universities are not seeking profit, instead they are becoming “self-sufficient” by adding new sources of revenue. Likewise, many for-profit institutions, especially from the US, are keen to enter India; however, Indian regulatory requirements prohibit them to profit from education and hence they have to work-around the requirements. For example, Singapore’s Raffles Education Corporation partnered with Educomp to establish a for-profit entity and offer education programmes for the masses, which are not recognised by local authorities.

The primary purpose of the Bill is “to regulate entry and operation of foreign educational institutions imparting or intending to impart higher education” leading to award of educational qualifications. Given the context and motives of foreign universities, more degree-offering programmes are expected to come from institutions seeking to enter India with the motive of profit/revenue as compared to prestige. The prestige-seeking universities will limit themselves to non-degree relationships and offerings only. The Bill will also add to the growth of private institutions, professional education and widening regional disparity.

Growth of private institutions

Public university system in many countries, including the US, is in crisis and faces serious budget cuts. Hence, they are not ready to invest money in partnerships. Indian public universities also lack resources and entrepreneurial zeal, and are stymied by bureaucracy to engage with foreign partners. Thus, private institutions in India or corporate partners are more likely to engage in partnerships with the foreign public universities. For example, Indiana University and Georgia State University are US public universities that have partnered with private Indian institutions, OP Jindal University and National Management School, Chennai, respectively.

Rise in professional education

Indian engineering and management institutions have doubled to about 2,000 and 3,000 institutions from 2005-06 to 2009-10. This rapid growth represents the demand for professional, job-oriented degrees. As these programmes have a relatively higher employability, institutions also have a better pricing power in this segment as compared to arts, science and commerce courses. This means that foreign institutions are likely to offer more programmes in engineering and management as compared to liberal arts and sciences. For example, recent partnership between Strathclyde University and SKIL Education, Carnegie Mellon University and Shiv Nadar Foundation, and Virginia Tech and MARG are all for professional programmes in engineering or management.

Widening regional disparity

Foreign universities would concentrate on metro cities and states that have high demand, pricing power, accessibility and employment opportunities for students. This means that they are not going to start campus in regions that actually require quality institutions. However, foreign universities will be most appealing to students from tier-2 cities like Nagpur or Indore where students, especially females, aspire to go abroad but may not match up to the financial, social or academic requirements. However, foreign universities in India would not attract academically brilliant or financially well-off who would continue to go abroad in search of best international education, experience and exposure.

Foreign universities are eager to engage with Indian higher education despite the challenges. In the immediate term, foreign universities will be cautious and partner with private institutions, offer popular professional programmes and situate themselves in major cities. This means that it will take a long time before its impact is felt by the masses and the larger landscape of Indian higher education. However, foreign universities will certainly create new expectations of quality and professionalism, which will bode well for the sector and students.

Dr. Rahul Choudaha

8 Comments

  1. Dr Rahul Choudaha,

    A very useful information kit this blog of yours. I am in the Business of Advertising and find that my pet area being education and how to reach it to the masses and vice versa, make the masses reach the Universities they are looking for, could come of use to Universities who want to reach that critical mass by using Online advertising through my company Xebec EMedia very profitable and useful.

    Regards,
    Julia Dutta

  2. Dear Rahul, Interesting article. I am an overseas education consultant based in Chennai. I have managed to put together 3 colleges in India with Universities abroad and 2 partnerships have materialised. Yet to see whether it will work or not but the trend is catching on. With over 400,000 students leaving abroad for higher studies, India is a large Education market and with affordablity of Indian middle class, there will be lots of activity in this area. If you need any market intelligence, I can assist you. My email ID is gigeos@gmail.com. Gigeo Sakkaryas

  3. It was an interesting article I have ever found and I am happy to say that Focus Edu Care, one of the pioneer in Indian Education, strives to impart comprehensive, innovative and market-driven education to students and professionals in today's global business environment, and thus helping learners imbibe their values of entrepreneurship, ethics and social responsibility.

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  4. List of foreign universities in India:

    ■Virginia Polytechnic Institute and State University (Virginia Tech)
    ■Georgia Institute of Technology (Georgia Tech)
    ■Schulich School of Business
    ■Boston University
    ■Middlesex University
    ■Duke University
    The foreign universities bill was approved by the union Cabinet in March this year (2010) and was introduced in the Lok Sabha on May 3, 2010.

    The bill, once passed, has the potential to create the same impact on India’s higher education sector as the economic liberalisation and deregulation in the 90s had on India’s industrial sector.

    The bill is unclear whether reservation of seats for OBC and SC/ST students would be an eligibility criterion for the foreign educational institutions to be notified as Foreign Education Providers (FEP).

    The FEPs would be treated as Indian private universities and allowed to set their own fee and would be exempt from reservations. Also, one of the concerns expressed in the monograph is the imposition of the condition that no repatriation of profits will be allowed might act as a deterrent for the foreign universities to enter India. Without a possibility of taking back its invested capital, a foreign institution might simply choose to not enter the Indian education sector.

    How will it Impact Indian Universities?
    The government’s nod to allow foreign universities to open campuses in India is drawing flak from educationists. They say universities won’t become Oxford if they set up in India.

    Kapil Sibal says,

    The universities that are going to be set up at all in India should have an Indian eco-system. Why should we want an Oxford here? We don’t get children from Eaton and Harrow. But yes, the quality of an Oxford is required in terms of research – of academics, knowledge generation and syllabi flexibility. So we should build institutions which are equivalent to those outside the country. And allow quality to come into the country, because there’s a huge gap between supply and demand. And since demand is going to increase exponentially, because India has a young population, we need to increase the institution of the supply. And all stakeholders – industry, private sector, foreign universities and public partnership should have a chance to participate in the system.

    Foreign universities are collaborating for research, but are hesitant to set up campuses in India because the Indian government regulations restrict aspects of administration including fees, salary and research grant.

    Kapil Sibal says,

    On the contrary, there are no regulations today, because we don’t have a law. We want to regulate these to ensure that quality institutions come in. They should have the freedom that they are entitled to under the national laws because we are changing the structure of our laws. They will have to go through an accreditation process and can teach what they want, in the manner they want and there will be no interference in those processes.

    Comments:

    I work at the University in NZ and am appalled at the quality and standard of education offered here for each and every child. Kapil Sibal’s initiative in join hands with Australian Univ is a landmark in improving the education sector in India. I personally would like to set up primary education and university level education in Indian towns and need to know more about the financial support offered by the government for beginners like me with grand vision for uplifting the village and town people of India -S Abraham

  5. I did read your article on financial express. They would have done a end to end research on the indian education. As you have mentioned in this post,that the growing institutions,employment opportunities, cost of education and the quality of education are the positive factors why so much of universities are coming here.

  6. I do not understand your views on regional disparity in education. Firstly, by establishing an institution in non-metro city/small town does not by itself help address any disparity, specially in higher education. Because, the entry to an institution of higher education depends on quality of students, unless being a 'localite' becomes another criteria for introducing a quota! Secondly, although I do agree that there is regional disparity in terms of economic opportunities, creating educational institutions in remote areas is hardly an answer to the problem. Because if the students cannot find a job near home, what benefit is there in earning a degree near home? Thirdly, the focus of the bill is to boost higher/technical education and research and not primary education. Given the state of Indian Universities and education today, it will only benefit bringing a lease of life to the almost non-existent research culture in India (I am from a social science background, and I think we are totally lacking in any fresh ideas when it comes to research). And fourthly, the objective of research, whether in science or social science, is not a long list of publications (which most of the University lecturers have)but to be useful in someway to the society. And if that 'usefulness' is backed by self generated revenue, what is the harm? I think the belief that 'teaching' is a 'secured job' and government grant is a matter of right for a public universities or the only source of revenue, is some of the important factors contributing to the lack of enthusiasm is our education system. 'Profit making' is not a sin because none of us work for free.

  7. Internationalization or globalization of higher education can be accomplished in other ways than physically building a school or campus in a foreign country considering all the challenges that need to be overcome: a different form of government , a different culture to name a few. Due to the budget cuts that almost all educational institutions face, why bother? Whatever happened to a high technology world and online education that can be offered globally? Wouldn’t this be a better alternative?

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