Foreign Universities in India?
Each year, $4 billion in tuition and housing leaves India for foreign shores, matched with the even more valuable loss of the country’s brightest students who have the means to pursue higher education in countries such as the U.S., Britain, and Australia. 150,000 are currently studying abroad, and another 100,000 depart every school year; many choose to settle abroad, and never return.
Prime Minister Manmohan Singh’s government is wrestling at this very moment with one possible solution to this conundrum. The Union Commerce Ministry has put forth a proposal to open up India’s education system to foreign direct investment (FDI)—in short, they propose to allow foreign universities to set up campuses on Indian soil, to serve Indian students.
Under Singh, the government has permitted FDI in industries such as telecom, insurance, food processing and retail, with a beneficial impact. The plan proposes to allow the best universities in the world, such as Oxford, Harvard, and the Massachusetts Insitute of Technology (MIT) to create a home in India; many other highly-esteemed American universities such as Stanford and Yale have already declared themselves eager to set up Indian campuses.
As a consequence, world-class education would be located closer to home and available to a larger number of students than those currently studying abroad. The number of college degrees per capita in India is lower than that of China, and only 11% of Indians ages 17 to 23 enroll in higher education, in comparison to 13% in China, 31% in the Phillippines, 27% in Malaysia, and 19% in Thailand. Indian academics would benefit, too, by the top-notch research facilities and educational communities when hired by the foreign universities to teach alongside visiting professors.
In addition, points out Gopal Krishna Pillai, the new Commerce Secretary, the money sent elsewhere could be kept within the country, and the costs for the new local education would be significantly cut. “If they are allowed to set up shop,” Pillai explained, the $4 billion currently going abroad “can be saved.” He elaborated on the proposal, saying that “We are preparing a discussion paper on the matter. Once ready, the proposal recommending FDI in education will be sent to the HRD ministry and Indian universities for their comments.”
And this is precisely where some of the problems start seeping in. The FDI in education plan is largely opposed by India’s Human Resource Development Ministry, headed by Arjun Singh, and the Left parties. They contest that it creates a conflict with national interests, and point to the fact that many nearby countries, worried that foreign sensibilities would affect local culture and politics, are denying FDI in education.
Part of the problem is that many foreign unversities will not be interested in setting up campuses unless they are exempt from the regulations placed on domestic universities. The HRD Ministry wants to regulate everything from courses to faculty salaries for any foreign university, an offer that is less than tantalising. The majority of universities are not truly considering the option until the current educational system is liberalised, freeing them from adherence to the controversial quota system that requires a certain amount of seats be reserved for members of underprivileged castes.
But this consideration is almost beside the point for many who oppose educational FDI regardless of regulations. “You can not treat education as an industry. Opening up the education sector for foreign players will be a cultural attack on India. We will not allow that,” stated D. Raja, Communist Party of India national secretary. Politboro member of the Communist Party S Ramachandran Pillai agreed that this move would simply equate education with commerce, rather than respecting it as an important part of culture. “Well, what is the need for us to run foreign playschools, colleges and universities in India?” he demanded.
But if the HRD Ministry does not consider the exodus of brilliant Indian minds and $4 billion anually significant “need,” there are even more issues to consider. 60% of India’s over 1 billion population are under the age of 25, and in order for India’s economy to continue at its current rate of expansion, a larger pool of well-trained managers and well-educated technical minds will be required. Some of India’s domestic education systems turn out word-class professionals, but the competition for these schools is brutal, and many are left behind. A McKinsey study last year found that only 25% of engineers and 15% of finance and accounting professionals trained in India would be competitive in a multinational company. Hard as it may be to believe, Indian companies have even begun looking for foreign talent to fill critical positions.
And the deficiency is not due to a lack of willingness amongst India’s youth. Many are simply unable to travel to receive higher education, a problem that would be remedied by having foreign universities set up local chapters. Many schools have already instituted field offices and research centers to get a feeling for local interest.
For example, the University of Michigan Business School’s economic research center in Bangalore has generated interest, while the Indian School of Business in Hyderabad, set up in conjunction with Kellogg, Wharton and London Business Schools, can be seen as a case study. Global faculty and courses are available at a fraction of the cost of travelling abroad, and the response from many students is the same: stay in India. Yashovardhan Gupta who has a GMAT score of 770, and comes from a business family, explained: “I had got admission in Cornell and Carnegie Mellon University among others. However, I found a global curriculum and faculty in ISB here in the country, so decided to stay here.†It seems that the only thing standing between potential students and an excellent, affordable education is the approval of the government.