New Delhi: The Union cabinet on Monday approved a Bill that seeks to allow foreign universities to set up campuses in India, a move that would potentially offer students headed overseas the choice of getting the same education at home and spur greater competition between institutions of higher learning.
The cabinet’s approval for the Foreign Educational Institution (Regulation of Entry and Operation) Bill, 2010, clears the path for its introduction in Parliament.
“This is a milestone which will enhance choices, increase competition and benchmark quality,” human resources development minister Kapil Sibal, who oversees education, said after the cabinet meeting presided over by Prime Minister Manmohan Singh.
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Foreign institutions seeking to set up campuses in India and offer degrees would, however, have to meet stiff conditions prescribed by the Bill. A foreign university aspiring for a campus presence in India will have to deposit Rs50 crore as a corpus fund and would not be able to repatriate the surplus generated from education activities here, according to the Bill.
Allowing foreign institutes to set up campuses in India is a key element of the government’s educational reform agenda. The move received cabinet approval once before, in March 2007, but the earlier United Progressive Alliance government, with Arjun Singh as HRD minister, did not manage to bring the Bill before Parliament.
“It means better choice for students—that’s the bottom line,” said Anand Sudarshan, chief executive of Manipal Education, which oversees several institutions, including Manipal University in Dubai. “Students with dollars in their pockets, they will get a chance to study in India itself in those kinds of institutions. And these institutions could be set up by themselves or through collaborations.”
Manipal Education is a part of Manipal Education and Medical Group that owns India’s first private university, Manipal University.
Although 100% foreign direct investment has been permitted in the education sector since 2000, the present legal structure does not allow overseas educational institutions to offer degrees in the country.
The proposed law prescribes an eight-month, time-bound format for granting approval to foreign educational institutions to set up campuses, which will be registered with the University Grants Commission or any other regulatory body that’s in place.
The Bill has a provision under which the government can reject an application it judges will have an adverse impact on national security.
Sibal has said that quota laws will not be applicable to foreign universities.
India sends the largest number of graduate students to the US, apart from China. Other popular destinations are the UK, Australia and Singapore, all of which have actively wooed Indian students.
The demand for graduates over the next five years in India is likely to be 13.8 million, analysts have estimated. But with only 13.2 million students graduating over the same period, India will face a shortfall of 600,000 graduates. Any opening of higher education can be a two-way gain, say experts. Students might stay back and study in India and the quality of education will improve.
Some are sceptical if the Bill will indeed open up the floodgates to investment in higher education. A few reputed foreign universities have already set up campuses at competing locations and may not look towards India. New York University’s campus in Abu Dhabi will accept its inaugural class this year. Post-recession, endowments are down, especially in US universities, affecting their ability to open new campuses.
Still, family-run trusts that control private institutions have steadily expanded their operations and run huge campuses in India, and their owners have the financial muscle to offer partnerships to foreign universities.
For instance, the UK’s Leeds Metropolitan University in Yorkshire is responsible for teaching students at the Leeds Met India campus in Bhopal, set up with investment by an Indian trust last year. Student exchange programmes and twinning arrangements have also grown.
“Their motivations for seeking presence in India may differ, but in their quest for talent, institutions of higher learning all over the world compete as well as cooperate with each other,” Amit Jain, assistant director in the international relations office at Singapore’s Nanyang Technological University (NTU), said in an email reply. “It is evident that the largest pool of such potential talent lies in vast and knowledge/skill seeking markets such as India.”
NTU this year launches a joint postgraduate programme with state-run Indian Institute of Technology, Bombay.
“From our point of view, the Bill will, at the very least, allow us to consider the appropriate model or models of engagement that we can adopt when developing our strategy for India,” Jain wrote.
Reuters contributed to this story.