India’s higher education sector is at a crossroads, grappling with ever increasing student population and a shortage of quality educational infrastructure.
India will need an additional 800 universities and 40,000 colleges within the next decade to accommodate 43 million more students. The Indian education market, valued at an impressive USD 55 billion, is on a robust growth trajectory. With an expected CAGR of 10% from 2023 to 2035, the sector is projected to reach USD 180 billion by 2035. India’s higher education sector is undergoing a transformative phase following the release of the National Education Policy (NEP) 2020, which emphasizes internationalization as a key component of reform.
Before the introduction of the NEP, foreign higher education institutions (FHEIs) could enter India only through partnerships with Indian higher education institutions (IHEIs), requiring approval from the University Grants Commission (UGC) and All India Council for Technical Education(AICTE). However, since 2020, the NEP has permitted FHEIs ranked among the global top 500 in the QS World University Rankings or recognized as reputable in their home country to establish campuses in India. Additionally, FHEIs within the top 1,000 can collaborate with Indian HEIs through twinning, joint, and dual degree programs. India’s education reforms signal its ambition to position itself as a global education hub.
With over 40 million students enrolled across more than 1,300 universities, India offers significant growth potential and investment opportunities while enhancing foreign higher education institutions’ visibility and presence in the Asia-Pacific market. With approximately 50% of its population under the age of 25, India has already demonstrated its immense potential. Moreover, the country’s middle-class population is fuelling an increased demand for quality education.
A growing middle class that prioritizes education, combined with the aspirations of a young and dynamic demographic, makes India an attractive destination for educational investments. With a strong talent pool, ample land, and supportive government policies, the country is poised for significant growth in higher education sector.
Setting up campus in India provides multiple benefits for FHEIs but also presents significant regulatory and bureaucratic challenges. Currently, the legal framework for foreign HEI campuses in India remains ambiguous. Most Indian educational institutions operate as not-for-profit entities in compliance with local laws. In contrast, the new regulations recognize that FHEIs must operate for profit to remain financially viable.
Aligning NEP and local Indian laws to enable FHEIs to function as for-profit entities is essential. Until then, FHEIs must carefully assess their investment strategies, understand the funding requirements for their entities, and develop clear operating models to avoid delays. Moreover, maintaining a positive relationship with the government is crucial to mitigating future challenges.
FHEIs must navigate India’s diverse cultural landscape of languages, religions, and traditions. Furthermore, the number of Indian institutions featured in the QS World Rankings has risen by 318% over the past decade, reflecting the improving quality of Indian institutions and the increasing competition for FHEIs.
Partnering with an education compliance consulting firm can help foreign HEIs effectively navigate India’s socio-cultural and regulatory landscape. These firms provide localized expertise, go to market strategy, ensuring alignment with cultural norms, operational practices, and compliance requirements. By addressing challenges such as diverse traditions, values, and a competitive education market, they enable FHEIs to establish a strong foothold and develop sustainable strategies for long-term success.
With evolving policies and a growing focus on internationalization, it may only be a matter of time before India’s regulatory framework aligns more closely with the needs of universities eager to set up in the country.
Foreign HEIs can begin with simpler approaches, such as direct student recruitment, partnerships with Indian HEIs, or establishing in-country representation, and later transitioning to setting up campuses when conditions are more favorable.