Should higher education be treated as a trade in services and should foreign direct investment be allowed in India? Although 100% FDI has been allowed through the automatic sector, since 2000, some foreign universities have evinced interest, not all have rushed in to set up campuses in the country as the regulations and guidelines under which they will have to operate have been one too many. However, this has led to several collaborations between Indian and foreign universities most are waiting to see if 100% FDI will be passed as law by Parliament. Recently, in reply to a question in the Lok Sabha, the minister of state in the ministry of human resource development, D Purandeswari, said: ?There is no separate sectoral policy notified for education sector. By virtue of Press Note 2(2000 Series), FDI up to 100% is allowed on automatic route in the education sector.?
Several Indian institutions such as Management Development Institute, NIFT, Pearl Academy of Fashion and Western International University among others have gone in for collaborations.
MDI has collaborations with 40 universities abroad?spread over Europe, US, China including ESCP-EAP, France, University of North Carolina, Chapel Hill, University of International Business and Economics, Beijing, Chinese University in Hong Kong. Said Dr Sujit K Basu, director, MDI, Gurgaon, ?MDI does not have any joint venture with any foreign university involving FDI. However, we do have a double degree programme with some foreign universities. In such measures after fulfilling all AICTE norms and requirements, students can take up additional courses in foreign universities and obtain an additional (double) degree.? Meanwhile, the HRD ministry appointed a committee headed by Prof CNR Rao in January 2005 to look into issues concerning the entry of foreign educational institutions into India and to frame recommendations.
The committee?s advice, based on which the central government is finalising a draft Bill on private educational institutes, have not yet become public. Western International University, USA was set up in a partnership with Modi-Apollo International Institute, through 100% FDI automatic route. The courses offered by the institute are MBA in Information Technology, MBA in Finance, MBA in International Business and MBA in Marketing among other degrees. The vice-chairman, Modi-Apollo International Institute, Charu Modi Bhartia, had told FE earlier, ?Foreign institutions were allowed in a 50:50 partnership with an Indian institute through this route. If the foreign institute wanted to increase its stake to more than 50% than it needs FIPB approval.?
According to a recent CII-Icrier report on higher education in India, 131 Indian institutions are collaborating with foreign institutions in the country. At present, only the US and the UK have shown interest in collaborating with Indian partners, it said. Nottingham Trent University (NTU) of the UK, for instance, has been collaborating with Pearl Academy of Fashion for the past eight years. NTU validates Pearl Academy of Fashion programmes. The institution also works with Welingkar Institute in Mumbai for bio-informatics.
According to a consultation paper on ?Higher education in India and GATS: An opportunity?, Singapore, which is positing itself as the educational hub in Asia, has declared its intent to 1,50, 000 global students by 2012. Singapore has attracted campus presence of Insead, France, MIT and University of Chicago Graduate School of Business, USA, among others.
Says Anand Sudarshan, MD & CEO, Manipal Education, Bangalore, ?The Press Note 2 (2000 series) had allowed FDI under the automatic route without sectoral cap. However, on a practical basis, this is of no relevance in higher education, as this cannot translate into reality due to two key reasons: the ability of such a corporate enterprise that realises FDI to actually offer a degree; and also the current status where there is complete lack of clarity on permission granted to foreign universities to operate and support an institution and grant a degree in India,? while adding, ?FDI is needed for capital.? The entry of foreign education providers into India is expected to unleash the potential for India to become an exporter of education than that of students as it is now.
Says Dhiraj Mathur, executive director, PricewaterhouseCoopers, ?FDI in education has been under the automatic route, however, it is FDI into companies which is under the automatic route. Under Indian regulations an educational institution needs to be a society or a trust. For making investments into a society or a trust, being under the non-automatic route FIPB approval is required. While AICTE has regulations dealing with institutions and colleges providing technical education, at present there are no regulations for setting up of foreign universities. Hence, due to lack of regulation, FIPB has not been granting approvals.?
Meanwhile, the Bill allowing FDI in higher education is yet to be tabled in Parliament, where the Left is set to oppose it. But, for West Bengal?s Left Front government, while FDI in education is ?bad?, foreign partners are not, going by the number of foreign institutes of higher learning that have set up in the state.
According to Sudarshan Roy Chowdhury, the state?s higher education minister, the Left parties are opposing FDI in higher education because the foreign institutes have a profit motive. ?We are against the concept of profit in higher education. As far as our experience goes we have not seen any sector benefiting out of FDI,? Roy Chowdhury said.
He feels that there is little chance of the Bill getting passed without the Left?s support. In West Bengal, outfits like Wigan & Leigh College and Sheffield Hallam University of the UK have tied up with leading institutes to offer courses in fashion designing, media, film, hospitality and sports management. According to Prof Krishnendu Sarkar, deputy director of the NSHM Knowledge Campus, which has tied up with Sheffield Hallam University, even without legal clearance for FDI, many foreign institutes are keen to tie up with local counterparts. ?The Bill on FDI would only help such institutes to have a brick and mortar setup,? he says.
Experts feel big names like Cambridge, Oxford, Stanford and Harvard varsities in the Indian education scene would bring about real quality in Indian education. Says Madhavan Vilvarayanallur, manager, KPMG, ?Foreign Direct Investment (FDI) in education, including higher education, is allowed in India under the automatic route, without any sectoral cap, since February, 2000. In the current system an international institution can offer courses in India with a local partner. As per the All India Council for Technical Education (AICTE) there are 106 institutions running technical programmes in collaboration with foreign universities and institutions. Of the 106 institutions, only two are approved by AICTE.?
China is creating different universities to cater to different needs and the government has declared education, science and technology a big requirement for sustained growth. QAI is a company that offers distant learning in Bangalore. Its CEO Navyug Mohnot says, ?I think India lags way behind other countries in attracting foreign investment in education.?
Malaysia invites foreign universities to set up campuses and this includes Monash, Curtin and Swinburn varsities from Australia. Says Atul Chauhan, chancellor, Amity University, ?Our university is planning to set up campuses in the US, UK, Germany, Singapore and Dubai for all the courses. We are expecting to set up them by 2008-09,? while Mihir C Joshi, a student of MDI, Gurgaon, says, ?Considering that education in India is the means of salvation for more than 300 million Indians as it will lift them out of poverty, politicians prefer to control it.? India, certainly, then has to find a way around the problem.
With inputs from Prachi Karnik Pradhan, Reema Jose and Ruchi Kapoor
