Indian Education space is the largest capitalised space in India.
It is a well-accepted fact that providing the right knowledge and skills to the youth can ensure the overall national progress and economic growth. There has been an unprecedented growth in the Education space over the last decade with a considerable improvement in the education sector. We can say that Indian Education sector helps to upward social mobility. But there are many concerned problems like financing and management including access, equity and relevance, re-orientation of programmes by laying importance on health consciousness, values and ethics and quality of higher education together with the assessment of institutions and their accreditation. These issues are significant for the country, as it is now engaged in the use of higher education as a powerful tool to build a knowledge-based information society of the 21st Century.
In terms of number of collaborations forged by foreign universities with Indian Educational Institutions, in 2011 alone, a total of 161 collaborations were reported.
Source: PWC on India: Higher Education sector and Opportunities for Foreign Universities.
The above picture shows the growth in collaboration of foreign universities with the Indian Institutions.
Talking about India and the ventures that are carried out here, the director of AICTE, Dr. Manpreet Singh Manna said, “Whenever we see any development, the contributions are made by the Indians but outside India. It is a matter of concern that India is neglected as a place for an innovation.”
The time is changing because, Today, foreign universities are deliberately making tie ups with the Indian Institutes for they can see a land of opportunities awaiting in the Education sector.
Why the need for Foreign Universities?
There is always a reason behind every new venture and when it comes to collaborations between the foreign universities and Indian institutions, there seems to be a lot of opportunities to venture in the indian education market.
Collaborations on the basis of twinning programs- This is carried out when a student undertakes a study course at its own institute in India for a prescribed period and then subsequently spending equivalent time in the overseas institute. In order to start twinning programmes in India, both Indian and foreign institution need to sign a MoU (Memorandum of Understanding).
Collaborations on the basis of providing services- Foreign Universities can tie up with indian institutions to provide services like curriculum, experienced faculty for teaching and affiliations.
Collaborations pertaining to Distance Education programs- Another reason behind the collaboration which is widespread is the distant education course or we would say, the programs offered by many Foreign Universities to Indian students. Here, Foreign Universities deliver their teaching, often on an individual basis, to students who are not physically present in a traditional educational setting such as a classroom, using technologies/ medium like the Internet.
Collaborations made for Student Exchange Programs- These programs encourage the students and with an intention to enhance cross cultural exposure and so as to provide a global perspective to students.
Collaborations with the Indian Institutes for Faculty Exchange Programs- These programs are initiated to enable proper study along with an exposure to the teaching faculty. This gives an opportunity to the teachers to exchange their ideas in the entire process.
Collaborations made for Joint Research Program- This program leads to a collective research between foreign researchers and indian researchers to further polish the skills of the young researchers.
The foreigners are projected to provide the much needed capacity and new ideas on higher education management, curriculum, teaching methods, and research. It is hoped that they will bring investment. Top-class foreign universities are expected to add prestige to India's post secondary system. All of these assumptions are at the very least questionable.
The education sector in India is evolving and has emerged as a strong potential market for investments in training and education sector, due to its favorable demographics and being a services-driven economy.
Impact of Foreign Direct Investment in the Education space
Foreign Direct Investment has always been a matter of concern for India, when it comes to education sector 100% FDI is allowed by the Government but, besides its advantages, it has some limitations or disadvantages also. In this paper an attempt has been made by the authors to highlight the good and bad effects of FDI in Education Sector.
The Regulatory Issues
There has been an enhanced interest shown by foreign universities in the Indian Higher Education sector on various relations. Also, it was witnessed that there has been an increased focus of the Government of India on liberalising the education sector in recent times, manifested by the proposed introduction of trendsetting Bills like foreign educational institutions (Regulation of Entry and Operations) Bill, 2010, Educational Foreign Universities are attracted to the Indian soil for carrying out investments in the Education space.
In 2016, the University Grants Commission (UGC) announced regulations regarding Indian university partnerships with foreign varsities. As per the UGC Regulations 2016, all Indian varsities collaborating with foreign universities need top accreditation grades and approvals from regulatory agencies.
The Government has strictly made the taxes liable for foreign educational institutions in respect of incomes received from India and in India itself. But it also depends whether the desired foreign institution has a taxable presence in India or not. If a ‘taxable presence’ is created in India, then tax rate in India could be as high as 40%. There are also other implications in the Indirect taxes and Services rendered by Foreign Educational Institutions may be liable to Service Tax in India in certain instances.
In India, education is the key to nation-building. India has a fairly liberated economy with no regulatory restrictions on payments made outside India for services amongst others. Thus, there is a vast opportunity for provision of innovative services. Given the lack of infrastructure and severe competition for quality education, amongst others, there is a large and rapidly growing market for coaching and tutoring services imparted through new and innovative means, particularly the internet.