Let’s not forget Western universities need Indian students more than ever

Indians spent $60 billion on higher education abroad in 2023. It is estimated that the count of Indian students overseas will hit 2 million soon and their total expenditure may reach $70 billion in 2025.

The numbers indicate high and growing demand among Indian students to study at universities of the Global North. What begins as education is often an opportunity to work there and eventually emigrate from India.

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Over the past decade or so, these universities have also grown keener to attract Indian students. Their eagerness to admit students from India can be traced to an ongoing decline in domestic enrolments and financial difficulties. This represents the emergence of a new paradigm of interdependence in the relationship between international students and host universities.

Foreign students represent 22% of all enrolments at higher education institutions in the UK, 24% in Australia and 30% in Canada. The US hosts the largest number of international students at 1.1 million, but they account for only 6% of all enrolments.

However, the share of international students in US varsities can be expected to increase in the coming years, given that the country’s higher-education sector is approaching a so-called ‘enrolment cliff’—brought about by an expected drop in the US population of high-school graduates—in 2026. This will translate to shrinking numbers of domestic students and make US universities more reliant on foreign students.

The advantage of attracting international students, other than their future potential contribution to the economies of host countries as innovators, job creators and workers, is that they can be charged higher tuition fees—on average twice as much as domestic students, or even more—without political consequences. With their large and growing numbers, the immediate financial benefits such students bring to the Global North are in the billions: more than $50 billion to the US (2023), $23 billion to Canada (2022), $32.4 billion to Australia (2023) and £41.9 billion to the UK (2022).

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Universities of the Global North are direct beneficiaries of all this, of course, and they use the revenue generated from international student fees to maintain academic standards. In many cases, such fees are critical to their very survival. As much as 20% of the income of UK universities comes from international students. The dependence is far higher at many institutions. The same is true in Australia and Canada. In the US, public universities rely more on international students now than in the past, as state outlays for them have reduced.

While the dependence of Global North universities on overseas students is often discussed, the larger point is usually missed: the emergence, as mentioned earlier, of a new paradigm of interdependence that this dependence has led to.

Earlier, from the mid-20th century onwards until the end of the Cold War, while young people in the Global South aspired to study at universities in the US and UK, they were welcomed for different reasons.

The US and its allies competed with the Soviet Union to attract students from what was then called the ‘third world’ to their universities for technological and professional training, so that they could later return home and help reform their home states and economies. The larger intent was to win their hearts and minds and secure their support and loyalty in the Western bloc’s geopolitical fight against communism.

As Hilary Perraton wrote in his 2020 book International Students 1860–2010: “The history of the cold war would be incomplete without the history of international students, that of international students incomplete without the cold war." However, with the end of the Cold War a little over three decades ago, that model became irrelevant.

Since the early 21st century, with a rapid decline in birth rates, falling student enrolment has become a major trend in Global North countries. At the same time, public spending on higher education has either stagnated or declined. As a result, the financial viability of scores of universities is under threat and therefore they have looked to admit larger numbers of international students with growing urgency.

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Fortunately for them, fairly large sections of the population in many populous Global South countries have become prosperous. Many more Chinese and Indian students are able to afford the fees of universities in the Global North. In 2022-23, nearly 58% of all overseas students in the US paid for their education from personal or family sources.

This new paradigm of interdependence will likely hold sway—with minor disruptions—in the near future. Disruptions to this model, such as caps on the number of international students that have recently been placed by Australia and Canada, will hurt both sides: those aspiring to study in the Global North as well as host universities, though the latter would be hit harder, given their need for fee revenues. Restrictions on a student influx aren’t something many of these universities can afford.

The author is director, The International Centre Goa.