Opportunities for Foreign Universities In India: A Regulatory Overview.

13 October, 2021

INTRODUCTION

Education is one of India’s most rapidly-growing sector, which is expected to be worth approximately USD 225 billion[1] by 2025. Enrolment in higher education institutions that stands at approximately 37.4 million[2] today, is estimated to grow by nearly 38% by the year 2030, with India potentially emerging as the single-largest provider of global talent where one in four graduates in the world could be a product of the Indian higher education system[3]. The Covid-19 pandemic has provided further impetus to this sector by increasing the acceptance of online education and opening fresh e-learning opportunities for national and international educational institutions. The Government of India (“GoI”) has also brought renewed focus on the education sector with the roll-out of the National Education Policy, 2020 (“NEP”), which lays down the future roadmap of education in India.

Expected Growth in Student Enrolment in Higher Education — Source: IBEF

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REGULATORY LANDSCAPE

Higher education in India is largely regulated by the University Grants Commission (“UGC”), which was formally set up pursuant to the University Grants Commission Act, 1956 and the regulations framed thereunder. UGC inter alia determines and maintains the standards of teaching, examination and research in universities and lays down the minimum standards of instruction for the grant of degree. Other regulatory bodies such as the National Board of Accreditation (“NBA”) and the National Assessment and Accreditation Council (“NAAC”) provide accreditation to various technical programs and colleges and to universities, respectively. The GoI has also established the National Vocational Education Qualification Framework (NVEQF) that would set common principles and guidelines for a nationally recognised qualification systems including schools, vocational education institutes and institutes of higher education reaching upto the doctorate level. Professional courses in India are further regulated by separate bodies such as the Medical Council of India for medical studies, All India Council for Technical Education (“AICTE”) for technical courses and the Bar Council India for legal studies. The NEP now proposes to include vocational courses in other bachelors’ degree programs as opposed to the existing ‘B.Voc.’ degrees introduced in 2013.

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From a foreign educational institution’s perspective, the AICTE Regulations for Entry and Operation of Foreign Universities in India imparting Technical Education, 2005[4], are applicable to international educational institutions looking to offer technical courses in India. These regulations provide for collaborative arrangements between foreign and Indian universities imparting technical education and also provide a framework for registration of standalone foreign educational institutions. Under these regulations all foreign educational institutions are mandated to seek express council approval prior to commencing of any form of operations in India.

Additionally, such foreign institutions have to comply with several mandatory requirements, which are mentioned below:

The foreign educational institutions are bound by the advice of AICTE with regards to admissions, entry level qualifications and the conduct of courses/ programmes in technical education.
Guidelines for admissions, entry level qualifications, the examination pattern and grading must not depart from the Indian practices and should be declared by the foreign educational institutions in advance.
It is the sole responsibility of the foreign educational institution to establish AICTE-approved centres and get programs accredited by the NBA.
An undertaking is required to be furnished declaring that the degree/diplomas issued in India shall be recognised in the parent country and treated at par with degrees awarded by other institutions in the parent country.

The UGC (Promotion and Maintenance of Standards of Academic Collaboration between Indian and Foreign Educational Institutions) Regulations, 2016[5], are appliable to foreign educational institutions offering non-technical courses and operating in India through collaboration with Indian educational institutions. According to Regulation 3 (1) (a), only a foreign university with the highest accreditation in its homeland can collaborate with an Indian university whose accredited grade is not less than A. These grades are awarded by NAAC, based on the assessment of various weighted criteria including curricular aspects, research, governance and leadership[6]. Each educational institution is provided with a Cumulative Grade Point Average (“CGPA”) based on which grades such as A++, A+, A, B++, and so on, are awarded. For grade A, an institution must obtain a CGPA between 3.01 and 3.25. If the qualifying criteria is met, both the universities must enter into a MoU or a bipartite agreement once the Indian educational institution has taken approval from the UGC. These regulations, however, only cover collaborative agreements to be executed between foreign educational institutions and Indian universities and do not provide a framework for operation of standalone foreign educational institution. Further, the professional bodies that govern professional courses in India have not provided a framework yet for foreign professional educational institutions to have standalone operations in India.

In order to encourage collaboration between higher education institutions, the UGC has recently released guidelines for ‘Internationalisation of Higher Education in India’[7] wherein the core objective is to promote active linkage between Indian and foreign higher education institutions, foster international competencies in Indian students and faculties and make India an attractive destination for foreign students. Whilst these guidelines are in the form of recommendations, they are in line with the intent of the NEP to recognise credits under a mutual twinning arrangement, wherein higher educational institutions are encouraged to enter into MoUs with foreign institutions to provide a holistic learning experience to students through cultural exchanges and social cohesion. These guidelines encourage higher educational institutions to adopt a ‘global citizenship approach’ so that the collaborative education system can help develop a global mindset of learners and shape them as global citizens. Institutions are also suggested to set up a separate ‘office of international affairs’ that would act as a single-point contact to ease the process of internationalisation of education in India.

NATIONAL EDUCATION POLICY, 2020

Keeping a vision of holistic development of students, the NEP provides for flexible curriculum wherein the students are provided the choice of selecting their subjects without firm division between arts and science, between curricular and extra-curricular activities, between academic and vocational streams, etc. Drawing inspiration from the western style of education, the NEP provides an option to the students to opt for a ‘major’ subject and a ‘minor’ subject with no bar on the stream of education. The NEP also provides for the National Testing Agency (“NTA”) to offer a high-quality common aptitude test, as well as specialised common subject exams in the science, humanities, language, arts, and vocational subjects, at least twice every year. The NEP further provides a legislative framework facilitating the entry of top 100 foreign universities in India and permits transferability of credits, which would provide opportunity to foreign universities looking to set up a campus in India and make it easier for students looking to shift from an Indian university to a foreign university. A significant change in the NEP is also the proposal to set up the Higher Education Commission of India (“HECI”) as an umbrella body for higher education, excluding professional education. This allows HECI to be a common regulator for higher education, that in turn uncomplicates the process for accreditation, funding, and setting of academic standards.

Further, due to increase in proposed collaborations with foreign institutions for higher education, reports state that India will need more than 1,500 new higher education institutions by 2030 to accommodate a huge inflow of students[8]. To work towards this, the GoI is promoting FDIs and opening up the external commercial borrowing route to allow funding to improve the educational infrastructure in India. This and the NEP implementation will pave the way for high-quality foreign universities to tap the Indian education sector and provide Indian students access to world class higher education.

CHALLENGES

Whilst the GoI is taking positives steps towards collaboration in various sectors, a number of barriers have limited the process of higher education collaboration and stifled the interest of foreign higher education institutions to set up a base in India. Some of the key factors include:

(I) Regulatory Framework: The multi-layer regulatory framework governing different aspects of higher education in India, lack of a single regulatory body overlooking the collaborations/ investments and multiple approvals required to operate in India, deter foreign higher educational institutions from investing in India.

(II) NEP Implementation: While NEP has taken the right steps to boost the education sector and pave the way for a globally-compatible education system, its implementation has been slow and requires clarity on multiple aspects such as:

the ranking system to determine ‘top 100’ universities as different ranking systems adopt different parameters and many high-quality foreign universities may not be eligible depending on the methodology adopted to identify the top 100 universities;
HECI as a common regulatory body for governance of higher education is a positive proposal but clarity is required on the integration of multiple existing bodies providing multiple accreditations into a single body; and
proposal for the NTA to serve as a unified autonomous testing organisation is again a positive step but if the universities have the discretion to recognise NTA assessments, then it may adversely impact the quality and consistency aimed for.

(III) Brain Drain: Indian economy faces the issue of ‘brain drain’ as the equipped and educated pool of Indians choose to go abroad for higher education. Hence, a policy challenge that stands before the GoI is to facilitate such tie-ups in a way that the Indian talent chooses to and is incentivised to remain in India and the Indian educational infrastructure is developed to match global standards.

CONCLUSION

The intent of the GoI, with respect to international universities setting up campuses in India, is clear from the provisions in the NEP. While implementation of the NEP is going to be gradual and some of the challenges identified above will remain in the interim period, the recent surge in the role of technology in the education sector has opened further possibilities for foreign higher education institutions to set up virtual platform offering online courses to Indian students. As implementation of the NEP progresses, these universities can follow up by opening physical campuses. Foreign education institutions looking to provide virtual or physical offerings in India should, however, ensure that they take necessary regulatory and tax advice and evaluate the compliance requirements before tapping the booming Indian education sector.