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Push educational services export

The gap between the export and import of educational services has been widening rather rapidly.

Push educational services export
In the higher education sector alone, for which relatively much reliable data is available, presently, no more than 50,000 international students are pursuing their studies in India. (IE)

By Furqan Qamar

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India has been aspiring to internationalise its higher education. Over time, a number of schemes and programmes were launched to bring international students to India, but to little avail. The ministry of commerce has now identified 18 champion services sectors to promote export. Education is reckoned as one of the most potent and least exploited sectors.

India has continued to remain a net importer of education, not only in terms of inflow and outflow of students for studies abroad but also in a number of other educational services.

India’s Balance of Payment (BoP) on account of education-related travel too has not only remained negative but the gap between the forex outflow and inflow has been expanding rapidly.

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Education-related travel could comprise travel abroad for wide-ranging purposes. It may include visits of educational delegation, students and faculty exchange, short-term study visits, educational tours, immersive student travel, and participation in seminars, conferences and workshops.

The Liberalised Remittance Scheme (LRS) of the Reserve Bank of India (RBI), presently permits resident individuals to remit up to $250,000 a year for ten specified purposes. These, inter alia, include international travel and studies abroad.

Remittances on account of international travel are further categorised into Business and Personal. The breakup of personal travel provides data on forex drawn for education-related travel.

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As per the existing rules, a resident individual can carry in cash $3,000 or its equivalent in other currencies for each personal travel, irrespective of the purpose.

The rules also provide for taking additional amounts but through travellers’ cheques or bank drafts. The entitlement shall, of course, have to be within the overall ceiling limit under LRS.

Travellers to India including those coming for education-related purposes, on the other hand, can bring up to $10,000, though, they are required to declare on arrival if they carry more than $5,000 or its equivalent in other foreign currencies.

RBI provides data on the forex inflows (credit) and outflows (debit) on account of education-related travel, as a part of its BoP reporting.

The LRS also permits outward remittances on account of studies abroad to any extent, but within the ceiling limits. RBI regularly reports data of forex outflow on this account.

However, it does not report data on the forex inflows on account of studies in India. Hence, it is only under the realm of guessing as to how much forex inflows arise on this count.

Indeed, foreign nationals, non-resident Indians and persons of Indian origin studying in India must be a source of forex inflows. The number of such students is not very large compared to the country’s potential but it is also not absolutely insignificant.

India is seen as a potential hub for education. It is not only seen as a lucrative destination for students seeking admission outside their homes but is also considered a gigantic market for education providers.

Given this perception, a much larger number of people must be travelling to India to study, explore the market possibilities, and participate in other education-related activities like seminars, conferences, summits etc

The data in this respect is, however, disquieting. Forex inflows on account of education-related travel showing an upward trend went up from $409.08 million in 2012-13 to $557.05 million in 2015-16.

Since then it has been sliding downhill, and has reached $108.91 million. The downfall cannot be attributed to Corona, because even in 2018-19, the year before the pandemic began, the forex inflows on this count had come down to $186.45 million.

Surprisingly, and in sharp contrast, the forex outflow on account of education-related travel abroad went up from $1,632.14 million in 2012-13 to $3,597.90 million in 2021-22. The only year that saw a drop in the figure was 2019-20 and that was obviously due to the pandemic-related lockdowns leading to travel bans.

Ostensibly, the pandemic did not deter Indians from travelling abroad for educational purposes as it did the international travellers to India.

Consequently, India’s Balance of Payment (BoP) on account of education-related travel has not only been historically negative but has gone up sharply in recent years, from $1,223.06 million in 2012-13 to $3,488.99 million in 2021-22.

As regards outward remittances on account of studies abroad the data is all the more disquieting. The outward forex remittances on studies abroad have been skyrocketing persistently, particularly since 2015-16.

The forex outflow on this count has, until recently, been increasing marginally. It rose from $114.30 million in 2012-13 to $277.10 million in 2014-15. Thereafter, it suddenly jumped to $1,200 million and has been rising exponentially since then. As of 2021-22, India remits an equivalent of $5,165 million to support Indians studying abroad.

In the absence of data on forex inflow, we can’t say for sure whether the BoP on this count is negative or positive. There are plenty of indications that the same would be grossly negative.

In the higher education sector alone, for which relatively much reliable data is available, presently, no more than 50,000 international students are pursuing their studies in India. The number of Indians going abroad for higher education is at least six times higher.

The most authentic source, the answer to an unstarred question in Parliament, has put the number of Indian students studying abroad at 1.1 million. This could probably include the total number of persons of Indian origin studying abroad, including the children of the expatriate community.

The fact, however, remains that the gap between the export and import of educational services has been widening rather rapidly, despite the ardent desire to have a positive BoP. The situation warrants serious introspection.

Probably freedom for educational institutions to attract international students may considerably increase the number of international students in the country. Ensuring quality and promoting excellence in domestic educational institutions may, to some extent, serve as import substitution.

At the same time, relaxing the restrictions and conditionalities for the participation of the international community in seminars, conferences, conventions and research collaboration may significantly enhance forex inflow on account of education-related travel.

The writer is professor, Jamia Millia Islamia, and former advisor for education, erstwhile Planning Commission.

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