The budget proposal to set up five new university townships near major industrial corridors could be the golden ticket for foreign institutions looking to establish campuses in India. Yet, according to sector experts, more clarity is needed on land and other approvals.
The government will support states in creating these university townships, finance minister Nirmala Sitharaman announced in her budget speech on Sunday, adding that these academic zones will host multiple universities, colleges, research institutions, skill centres and residential complexes.
The plan could benefit foreign universities seeking a low-risk opportunity to enter the Indian market, according to Suchindra Kumar, partner and leader of education at consulting firm PwC India. “Some foreign universities are wary of the heavy capital expenditures. These townships will provide the infrastructure for the universities to set up on a ‘plug and play’ model like Gift City, attracting more of them to enter the Indian market.”
India’s plan marks an effort to stem the exodus of Indian students eyeing foreign education. The number of Indians studying abroad has more than doubled from 6.85 lakh in 2016 to over 18 lakh by 2025, making it the largest source of international students, according to the Economic Survey for 2026-27. Indian learners focus on countries such as Canada, the USA, the UK, and Australia because of their perceived education quality, work rights, migration pathways, and strong branding.
Targeting foreign students
Newer degrees and colleges, however, are not just aimed at increasing the options to retain local aspirants, but also at attracting foreign students.
“In 2024, for every one international student coming to India, 28 Indian students went abroad, with significant associated foreign exchange costs,” the economic survey highlighted. “Annual outward remittance under the ‘studies abroad’ component has increased to USD 3.4 billion in FY24.”
The finance minister announced a new National Institute of Design, a second National Institute of Mental Health and Neurosciences (Nimhans), new National Institutes of Pharmaceutical Education and Research, a National Institute of Ayurveda, more All India Institutes of Medical Sciences, a National Institute of Hospitality, veterinary colleges, and Indian Institute of Creative Technologies partnerships with colleges.
These expand options beyond the typical engineering, medicine, and liberal arts courses available, according to Narayanan Ramaswamy, partner and national leader for education and skill development practice at consulting firm KPMG in India. “This helps students explore emerging fields at home instead of studying abroad."
Australia's Wollongong and Deakin universities, and a joint initiative by the universities of Birmingham and Melbourne already offer courses in India. Meanwhile, King's College London, Cambridge, Oxford (UK), Massachusetts Institute of Technology (MIT) and Stanford University (US) are exploring partnerships and dual-degree models.
Clarity needed on land, approvals
Ashwin Damera, co-founder and executive director of edtech Emeritus, said that the announcement of five university townships near industrial and logistics corridors is a potentially positive development. Emeritus is partnering with global universities such as the Illinois Institute of Technology, the universities of Aberdeen, Bristol, York, Liverpool, Victoria, and New South Wales (UNSW) to help them establish and operate campuses across India.
However, Damera cautioned that details remain unclear and timelines will be long.
“We don’t yet know where these townships will be, how the land will be provided, or what the financial framework looks like,” he said, adding that several layers of approvals would still be required.
“State governments will have to come on board, land acquisition and titles will need to be sorted, and then there’s the question of whether universities have to buy land or get it at subsidised rates,” he said, adding that most foreign universities are not looking to buy land in a big way when they enter a new market.
Mint’s queries to the universities of Deakin, Wollongong, Southampton, Queen’s Belfast, York, and Liverpool did not elicit a response at the time of publishing the story.
TCS relief won’t sway students
The budget also slashed the tax collected at source (TCS) on foreign studies from 5% to 2%.
“Even though the TCS reduction is a positive signal for Indian students planning to study abroad, contrary to the narrative set by the government in the past 2-3 years, avoiding foreign outflow of students, it may not have any direct impact on either encouraging or discouraging students from pursuing higher education abroad,” said Piyush Kumar, regional director of South Asia, Canada and Latin America at global education services IDP Education.
“Tuition fee and living expenses in a foreign country can easily go up to ₹40-50 lakh, so for students self-financing, a 3% benefit translates to anything above ₹1 lakh of better cash flow,” said Kumar. “The amount would otherwise be locked, without any interest, for over a year until claimed in the income tax return.”