Global education is watching as India moves to allow foreign investments in education.
The recent Union Budget signalled India plans to ease rules on foreign investments in education and open up the regulated sector. The budget proposed to encourage foreign direct investment and external commercial borrowings (ECBs) in education.
It is timely – India’s education sector is “capital starved”.
We have to wait for the actual rules, but it looks like the government may allow foreign education players to repatriate a portion of their income in India instead of requiring them to plough back all their earnings into their Indian operations. This would remove a key restriction that academics and experts have flagged for years as a disincentive to foreign investment in education.
The outcome of all this could be more global investment into existing Indian institutions, plus more foreign education institutions opening up in India.
This would be change on a radical scale. It’s needed – India’s education sector is struggling at all levels.
Finance Minister Nirmala Sitharaman (pictured above) said in her budget speech: “It is felt that our education system needs greater inflow of finance to attract talented teachers, innovate and build better labs”.
Please note – though FDI in education through the automatic route is already allowed, it has largely remained confined to the unregulated education technology space.
Expect innovation. Many European campuses are looking at opening special centres within Indian partner universities, rather than going it alone.
Plus greater global collaboration in delivering degrees could be a great outcome – so the student experiences both the Indian and the overseas providers.
So – here is what we are waiting for – the Centre needs to frame rules to ease both fund flow to India and institutional collaboration and how a foreign educational player investing in India will be allowed to take back money that they make in India.
Watch this space…