Indian universities must prepare for foreign competition at home

Foreign universities have been allowed to open campuses at GIFT City in Gujarat where the UGC rules won't apply. Photo: AFP
Foreign universities have been allowed to open campuses at GIFT City in Gujarat where the UGC rules won't apply. Photo: AFP


Our institutions of higher learning will need to adapt quickly as local campuses of foreign universities start springing up.

Last year, about 800,000 Indian students went abroad for higher education, and spent 45,000 crore yearly on their tuition fees alone. About 200,000 Indian students chose the US as a destination for their higher education. This was a 19% increase from the previous year. It is estimated that by 2024, 1.8 million students will go abroad and spend about 6.4 trillion in tuition and living expenses: that is, 2.7% of India’s gross domestic product (GDP). This is a big drain on Indian financial and human capital. Indian institutions are unable to retain talent domestically. It will take us a while to make our universities globally competitive. Consequently, to meet rising demand, Indian policymakers are contemplating inviting foreign universities to India. Is this a good idea? Would it help in retaining talent and capital? What would be the consequences on domestic institutions and how do they face this competition?

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Given the staggering growth in students going abroad for higher education, the options available to the Indian government are limited. It is an inevitability that India would have to open its doors to foreign universities.

About a month back, as a pilot, the government allowed foreign universities to set up campuses at GIFT City in Gujarat. This is a Special Economic Zone where regulations of the University Grants Commission do not apply. These foreign universities would be free to repatriate profits to their parent campuses.

It is a matter of time before other states in India open their doors as well. It is yet to be seen how foreign universities and domestic students respond to this move. However, we can make a reasonable forecast.

Students primarily go abroad not just for higher education, but for subsequent job and immigration opportunities. In the larger scheme of things, then, the money spent on education is worth it. Loans can get repaid with commensurate income gained through a job overseas. When foreign universities offer quality education on Indian shores, the willingness of students and their families to pay high fees without opportunities for immigration might not be the same. Universities may need to offer various pathway options that allow students to study in India and complete their degrees abroad. Additionally, it remains to be seen whether foreign universities can attract their faculty to India. It is easier to do that for short courses in business schools that charge huge fees, but it may be difficult to do the same for undergraduate programmes.

Universities in India, primarily those that target students from high income brackets, will face new competition. So far, they were relatively insulated from the appeal of foreign universities, as they were located onshore and designed to offer a similar global experience in India. However, once foreign universities set up their campuses in India, the competition for students, quality faculty and staff would only increase. There would also be additional competition for philanthropic capital as well. Market forces will force domestic universities to differentiate themselves for survival. At a basic level, their sole differentiating factor would be that Indian universities understand India and its needs better. That would be their principal advantage.

India is currently the world’s fastest growing large economy. Its emergence has a long way to go, and is looking for good talent in huge numbers in all domains. Premier institutions in India are too few and do not adequately fulfil demand. Rather than try to ape foreign universities and remain poor copies, Indian universities will need to integrate their programmes more closely with Indian societal and market needs. We need to invest in knowledge creation and in scholars. The academic curriculum, while being global, needs to have an Indian core that serves India first. Their faculty, while being composed of domain experts, needs to have an understanding of domestic needs.

India can emerge as the growth and talent engine for the world as we go forward. We need to gain that confidence and design our universities in that light. We need not chase global standards that are used for ranking universities. We need to define quality in our own context. We need high quality research content from the Indian standpoint, from textbooks and case studies to journals, etc. This will feed the curriculum and train our students. We need to produce high-quality scholars and incentivize talent that has studied abroad back to come back to India. We need to mine our vast knowledge heritage and explore how it can be used to address emerging global challenges; this could be our unique advantage.

Indian students today are a key source of funds for universities around the world. As the Indian population grows for the next 25 years, and as aspirations and the ability to afford quality higher education increase across the country, today’s exodus of students from India is only going to increase. While foreign universities are losing domestic students due to an ageing population, they see India as an opportunity to tap.

Indian universities should take the lead in retaining talent on their shores, and this can only happen if we stop aping the West and think of India first while keeping an eye on the world. Indian universities have to redesign themselves to face this emerging challenge. The government, while allowing foreign universities and letting market forces work, needs to extend support to domestic universities through supportive policies. As we enter a new era of higher education in India, there will be exciting times ahead.

Suresh Prabhu & Shobhit Mathur are, respectively, a former cabinet minister in the Government of India, and co-founder and vice-chancellor of Rishihood University.

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