Why are foreign universities expanding into India?

 Why are foreign universities expanding into India?

 Foreign universities are expanding into India primarily to compensate for declining international enrollments and to diversify their revenue sources. This strategic move is driven by a combination of financial pressures faced by universities in their home countries and significant market opportunities presented by India.

Here are the key reasons why foreign universities are expanding into India:

•Financial Reliance on International Students and Recent Challenges

◦In the post-Second World War era, many countries in the Global North expanded their higher education infrastructure to accommodate a growing number of young people. However, with falling birth rates, domestic enrollments eventually plateaued and began to decline, leaving institutions with infrastructure and human capital too large for the diminishing numbers. This, coupled with cuts in public spending on higher education, led to financial challenges.

◦The solution found was to admit larger numbers of international students, who could be charged substantially higher tuition fees. Universities in major host countries like the U.K., Australia, Canada, and the U.S. have become financially reliant on international students to varying degrees. For example, in 2023, international students represented 22% of total enrollments in the U.K., 24% in Australia, and 30% in Canada. Even in the U.S., where they make up 6% of total enrollments, international students account for 27% at Ivy League schools.

◦Recently, a "blowback" has occurred, with Australia and Canada capping their international student numbers, and new rules in the U.K. reducing student visa applications in 2024. These restrictions are hurting universities, leading to widespread redundancies in the U.K., Australia, and Canada. Therefore, many universities are now looking to India as a solution to offset these reduced numbers and to diversify their income streams.

•Immense Opportunities in the Indian Market

◦India offers significant prospects due to its young population and a relatively low but steadily rising gross enrolment ratio of just under 30%.

◦The Indian higher education market is vast in terms of student numbers, with over 40 million students.

◦While the affordability for an average student or family can be a challenge, India is a growing economy, suggesting that in the coming years, more people will be able to afford a relatively expensive college education.

◦India also lacks a sufficient number of good quality Higher Education Institutions (HEIs); beyond a small number of public and a few private institutions, most are considered average to mediocre. Foreign branch campuses are expected to offer better quality education than the majority of existing Indian HEIs.

◦For Indian students who desire a foreign degree but intend to work in India, these branch campuses will provide the option of obtaining a foreign degree at home, rather than needing to emigrate.

•Supportive Indian Policy Environment

◦India has had a long-standing interest in attracting foreign universities. The 2020 New Education Policy (NEP) revived this interest, and the government subsequently approved the UGC (Setting up and Operation of Campuses of Foreign Higher Educational Institutions in India) Regulations, 2023 (FHEI), facilitating their establishment.

◦As a result, several universities, including seven from the U.K., five from Australia, and one each from the U.S., Italy, and Canada, are currently in the process of obtaining necessary approvals or have already done so. Many of these will be located in GIFT City and Navi Mumbai.

In essence, foreign universities are expanding into India as a strategic response to the financial challenges posed by declining international student enrollments in their traditional markets, leveraging India's large, growing, and increasingly affluent student population that seeks quality higher education and foreign degrees.