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Author: Padmini Subhashree, B.A.,LL.B.(Hons.), Editor in TRANSFIN. Media Pvt. Ltd.

As per the Ministry of External Affairs, since the War in Ukraine began, more than 12,000 Indian students have left the country. Many, however, are still stranded in places like Sumy and Mariupol where the fighting is currently at its thickest.

Ukraine had been a popular destination for Indians to study medicine, nursing and dentistry. Why?

1) A reasonably good level of education

2) Cheaper tuition fees than in India

And while these are very good incentives to procure an overseas degree, contingencies like a War (or a pandemic) can easily disincentivise them.

Indian students have famously accounted for the lion's share of enrolment in campuses abroad, especially in the West, due to the higher standards of education and quality of employment. These are considered pretty enticing motivations even if such an education burns a hole through one's pocket. And not to forget, the ordeal of leaving one's home country that comes with such pursuits.

But what if students didn't have to leave their homes in order to study in foreign universities? What if the promise of an overseas education came with the same standards as before but right at your doorstep?

The Indian Government's new education policy seems to have put this framework in the spotlight. The wheels of the Budget promise made by the Finance Minister this year, "world-class foreign universities and institutions will be allowed in the GIFT City to offer courses in Financial Management, FinTech, Science, Technology, Engineering and Mathematics free from domestic regulations…", have been set in motion. Essentially, what was envisaged under the National Education Policy (NEP) 2020 has now taken operational flight.

At least four foreign universities have been verified to have started preliminary discussions with the regulators and GIFT City authorities to establish facilities inside the GIFT IFSC in Ahmedabad.

What will be the implications if these universities are allowed to set up shop inside India? Let's see.

The Foreign University Platform

First of all, how big is the market for onshore foreign universities in the country? Indian students spend an estimated $13bn annually for higher education purposes abroad. In just under three years (2016-2019), the number of Indian students enrolling abroad rose by 75%.

This tells us that there's quite a large addressable demand for foreign universities in India.

But even if these universities absorb scores of Indians every year like a raisin absorbs water, it is highly uncertain if they will be willing to set up satellite campuses in the country. Last year, only eightfrom the Times Top 100 World Universities said that they would be interested in setting up campuses in India.

This is not to say that they have completely dismissed the idea. Most of the universities who had been exploring entry to India have categorically stayed away due to "unfavourable" regulatory environment, by their own admission. Universities, like other enterprises, run on profits and therefore, the only way to attract them to Indian shores is to give them proper incentives to conduct businesses.

Incentives, which come in a wide range of regulatory assistance across different sectors like land, hassle-free registration, permissive regulation, tax benefits, autonomous functionality and most importantly, attractive location.

Which brings us to…

GIFT-Wrapped Higher Education

Why are these campuses being housed inside the GIFT City?

The GIFT City is a special economic zone (SEZ) for international financial services. It means that a lot of rules that apply to businesses in the rest of India don't apply here, which literally makes it a mecca of finance and business.

For instance, Indians can trade in foreign stocks like Apple, Tesla etc. inside the GIFT IFSC. They can also invest in several alternate investment funds (AIFs) like hedge funds or venture capital funds that aren't offered anywhere in the rest of the country. Additionally, one of the biggest advantages of the GIFT City is the myriad of tax exemptions offered for its investments.

So, if the goal is to attract a bunch of foreign universities which are looking to maximise their international outreach, GIFT City could act as their perfect entry point. Not only does it offer a wide range of tax exemptions and regulatory lenience, but it is also prime real estate in terms of all things business and finance. To top it off, Gandhinagar has an expansive education cluster that offers a favourable operational environment. What better location to house an education hub than a sprawling business district in the heart of India's industrial belt?

The GIFT That Keeps Giving

As long as we're talking about incentives for foreign universities, the most radical one offered by the Government seems to be in the form of separate regulation from the domestic universities. But how would this be made possible?

Think about it this way. When it comes to financial operations, the GIFT City is a jurisdiction separate from the whole of India. It offers financial services in foreign currencies. Very soon, it will have its own arbitration centre to resolve cross-border disputes. This sort of regulatory vaticanisation is most fertile for operating foreign universities who, by virtue of their brand clout and reputation, wish to operate in their own independent league.

Plus, the offer of market-linked courses like financial management, fintech, science, technology, engineering and mathematics is suitable for rapid employment in the finance park itself. At a time when the country needs more talent and manpower in key industry-linked areas like fintech, deeptech etc., foreign universities can augment the capacity to generate such talent through satellite operations inside the country.This kind of industry-academic partnership could also come in handy from a skill-training and job-readiness perspective.

Furthermore, it would instrumentalise a cap on the "brain drain" that has long plagued the Indian education sector as graduates permanently move away to foreign destinations after attending universities there.

When Greeks (and Universities from Other Countries) Come Bearing GIFTs

When all is said and done, yes, foreign universities entering India have a net positive outcome. But when it comes to their operation and management, treating them alongside a different pedestal vis-a-vis domestic universities is a dangerous precedent.

When you have different scales of revenue, tax, enrolment, recruitment and management metrics for institutions of domestic- and foreign-origin inside the same country, there is an unfavourable balance created in both the education as well as the job market.

Sure, GIFT City is an exception owing to its SEZ status. But in the long run, the Government clearly intends to make GIFT City a springboard for launching into other states which means the model of operations undertaken there are sure to be replicated across the whole of India.

That isn't something that may sit well with either the domestic higher education institutes or the governing bodies like UGC, AICTE, NAAC etc. Private education institutions may see a particular disadvantage as the rush of talent skews in their favour with more and more students chasing the onshore foreign campus dream.

And then, there are the discrepancies in curriculum which are likely to come with parallel modes of instruction, faculty, operation and evaluation for students inside the same nation leading to an undesirable hierarchy.

To be fair, this isn't the first time that the idea of foreign university campuses in India has been conceived. Following the expansion of the FDI limit to 100% in the education sector in 2000, successive Governments have drafted one bill after the other lamentlessly to make the onshore existence of foreign universities a reality.

But this is the first time that the independent and isolated existence of these universities is being contemplated as opposed to the "campus-in-campus" model (tie-up with domestic universities) as was envisioned before.

Perhaps now is a good time to think about a combined approach - a mix of the campus tie-ups with specialised operations inside SEZs like GIFT City. This wouldn't just assist in an organic amalgamation of the campus culture but also ensure non-discrimination between foreign and domestic universities. Intelligently-scripted mergers are perhaps India's calling when it comes to improving the lot of domestic education and developing them at par with their foreign counterparts.


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