India’s decision to permit foreign universities to establish campuses on its soil marks one of the most consequential shifts in its higher education policy since Independence. The University Grants Commission’s 2023 regulations enabling internationally reputed institutions to operate in India have been framed as a forward-looking reform—one that promises global integration, improved academic quality, and enhanced student choice. While these objectives are legitimate, the development also warrants a deeper and more uncomfortable examination of why such an opening has become both attractive and necessary.
After more than 75 years of state-led expansion in higher education, India today hosts over 1,100 universities and more than 43,000 colleges, enrolling approximately 41 million students, making it the 2nd largest higher education system in the world. Yet, scale has not translated into global influence, academic depth, or sustained confidence among its own students? The entry of foreign universities should therefore be read not only as an opportunity for collaboration, but also as a structural signal—pointing to long-standing gaps in quality, governance, relevance, and credibility within the domestic system.
Questions on Students’ Mobility
One of the clearest indicators of institutional stress is outbound student mobility. In 2023, an estimated 1.3 million Indian students pursued higher education abroad, up from approximately 770,000 in 2019, representing a 68% increase in four years. The preferred destinations were the United States (268,000 students), Canada (319,000), United Kingdom (161,000), Australia (122,000), and Germany (42,000). These numbers place India among the largest exporters of students globally, second only to China in absolute terms.
While international education has always been part of elite aspiration, the scale and consistency of this outflow suggest systemic dissatisfaction rather than isolated preference. Surveys by international admissions bodies consistently show that Indian students cite quality of education, research exposure, employability, and academic autonomy as primary motivations—often ranking these above migration or lifestyle considerations.
The economic dimension of this mobility is equally consequential. According to Reserve Bank of India (RBI) estimates and international education market analyses, Indian families spent approximately USD 47 billion on overseas education in 2023 alone. This figure includes tuition fees, living expenses, insurance, and ancillary costs.
To contextualize this magnitude:
-
USD 47 billion could finance 470 research-intensive universities at USD 100 million each,
-
or support nearly 1 million doctoral fellowships at USD 50,000 per annum,
-
or fund 10 years of R&D expansion to raise India’s research spending closer to OECD averages.
Instead, this capital accrues to foreign education systems. For example, Australia’s education sector estimates that Indian students contribute USD 7.8 billion annually to its economy. The UK’s higher education sector generated GBP 41.9 billion from international students in 2022, with Indians constituting the second-largest cohort. These figures underscore that India is not merely exporting students—it is underwriting knowledge economies elsewhere.
[Bad] Economics of Incentives
India’s higher education challenges are neither accidental nor obscure. Over time, a dense regulatory architecture has evolved, involving multiple bodies such as the UGC, AICTE, NAAC, and various state councils. While conceived to ensure quality and equity, these structures have frequently emphasized procedural compliance over academic outcomes.
Accreditation outcomes illustrate this imbalance. Approximately 70% of NAAC-accredited institutions receive grades of ‘A’ or ‘B’, yet employer surveys repeatedly flag deficiencies in communication skills, analytical ability, and applied problem-solving among graduates. A 2022 ASSOCHAM study found that only 47% of Indian graduates were employable across sectors, with employability in engineering falling to 18%. These gaps highlight a disconnect between certification and capability.
Curriculum revision cycles further exacerbate this problem. Many universities continue to operate on syllabi designed in the 1980s and 1990s, updated incrementally through committees constrained by administrative timelines. As a result, academic programs often lag behind industry transformations in artificial intelligence, data science, biotechnology, advanced manufacturing, and sustainability studies.
India’s research ecosystem reflects similar structural constraints. In 2022, India invested approximately 0.64% of GDP in research and development, compared to 2.4% in China, 3.5% in the United States, and 5.6% in Israel. This underinvestment has predictable outcomes. India filed 61,573 patents in 2022, while China filed 1.6 million and the US 594,000.
Beyond quantity, concerns persist regarding research depth and impact. Incentive systems that prioritize publication counts, indexing, and formal metrics have unintentionally encouraged low-risk, derivative work. Studies by international scholarly watchdogs have identified 100s of journals engaging in questionable editorial practices, many of which attract submissions primarily due to promotion-linked requirements rather than intellectual contribution.
The result is a research culture that often values visibility over veracity and output over originality—conditions that undermine global credibility and long-term innovation.
Labour Market Response
The labour market has responded pragmatically. Between 2018 and 2023, global firms such as Google, IBM, Apple, and Microsoft removed formal degree requirements from the majority of job postings. Indian firms followed suit. According to a 2023 NASSCOM report, 73% of Indian technology companies now prioritize skills assessments over academic credentials.
Parallelly, alternative learning platforms have expanded rapidly. In 2023, Coursera reported 19 million Indian learners, while Udemy’s India user base reached 8.2 million. Domestic platforms such as upGrad, Great Learning, and Scaler Academy report placement outcomes comparable to, and sometimes exceeding, mid-tier engineering institutions—often within significantly shorter timeframes.
These trends do not signal the irrelevance of universities per se, but they do underscore the consequences of misalignment between formal education and economic reality.
Against this backdrop, foreign universities see India as both an academic and commercial opportunity. Institutions from Australia, the UK, and Europe have announced plans for campuses in Gujarat, Greater Noida, Hyderabad, Mumbai, and other regions. Their interest reflects India’s demographic scale, rising middle class, and unmet demand for globally benchmarked education.
Proponents argue that foreign campuses can introduce competition, global standards, and pedagogical innovation. These outcomes are possible—but contingent. Without clear policy safeguards, there is also a risk of reinforcing stratification. The UGC guidelines currently permit foreign institutions to maintain fee structures comparable to their home campuses, effectively placing such education beyond the reach of most Indian households.
Absent mandatory provisions for need-based aid, regional research mandates, or inclusion objectives, foreign campuses may primarily serve a narrow demographic—creating a parallel elite system rather than uplifting the broader ecosystem.
A comparative perspective is instructive. China operates over 75 Confucius Institutes globally, France maintains 800 Alliance Française centers, and Germany’s Goethe-Institut spans 98 countries. These institutions project cultural and academic influence while supporting domestic universities.
India’s global academic footprint remains limited. While cultural diplomacy exists through the Indian Council for Cultural Relations, no Indian university has successfully established a large-scale, degree-granting campus abroad that attracts international students at scale. This asymmetry reflects the gap between India’s intellectual potential and its institutional export capacity.
Catalyst or Managed Decline?
The entry of foreign universities could serve as a catalyst for overdue reform—prompting curriculum modernization, governance flexibility, research investment, and merit-based academic labour markets. There are early signs of movement: revised curricula in select institutions, interdisciplinary programs under the National Education Policy 2020, and limited international faculty hiring.
However, a less optimistic scenario is equally plausible. Foreign universities may capture the top 10–15% of the market, domestic elite institutions may marginally improve, and the majority of students may remain within structurally constrained systems—now with visible international comparisons that intensify inequality.
If India seeks genuine transformation rather than symbolic globalization, reform must extend beyond branding and access. This requires:
-
Regulatory simplification and institutional autonomy,
-
Substantially increased R&D investment,
-
Competitive academic compensation,
-
Evaluation systems focused on real knowledge creation,
-
Support for interdisciplinary and problem-focused research.
Dr. Jaimine Vaishnav is a faculty of geopolitics and world economy and other liberal arts subjects, a researcher with publications in SCI and ABDC journals, and an author of 6 books specializing in informal economies, mass media, and street entrepreneurship. With over a decade of experience as an academic and options trader, he is keen on bridging the grassroots business practices with global economic thought. His work emphasizes resilience, innovation, and human action in everyday human life. He can be contacted on jaiminism@hotmail.co.in for further communication.