1. Reads
  2. Lite

How Does The NEP 2020 Make Room For Foreign Universities In India?

Oct 13, 2020 10:58 AM 3 min read

Albert Einstein once famously said: "The only thing that interferes with my learning is my education."

Be that as it may, it can be difficult for any government to share such bohemian zeal, especially in a country like India, where the scarcity of quality education can quickly tilt the balance of its much-cited demographic dividend into being its burden.

Consider Srikant Datar, an IIM-alumnus and a career-educator hailing from Mumbai, who was just named as Dean of Harvard Business School. 

While it is an inspiring story, it makes one wonder: how much of his Stanford-education contributed to his success? And will it require the same level of education for all of us to get there?

It's a truly beneficial objective. Allowing foreign universities to set up satellite campuses in India is a prospect that could save up to $15bn annually spent by Indian students. 

Greater partnerships between universities will boost cross-cultural exchanges and technical know-how immensely. And think of all the tax revenues that would accrue?

NEP Talk

The National Education Policy (NEP), 2020, released on July 29th, takes (or claims to take) a fresh and rather outward looking view, with reasonable emphasis laid on opening the Indian education market to foreign universities. 

NEP 2020 pushes for a legislative framework to facilitate select foreign universities (among the top 100 in the world) to operate in India. These universities would be reportedly granted special dispensation for their operations “at par with domestic autonomous institutions”. 

But is it anything more than policy gymnastics at this stage?

Reality Check

Let's get two things straight here.

One, a policy is NOT law. It doesn't have any enforcing power. So tomorrow, there is nothing stopping the Government from reversing the NEP or not acting on the same.

Two, not much is clear when it comes to foreign universities entering India based on a read of the NEP. For instance, 

  1. What kind of framework are we talking about? Statute? Guidelines? Rules? Notifications? All of them have different working mechanisms and power.

  2. Why just the top 100 universities? Also, which world rankings are we talking in particular (because there are dozens)?

  3. Autonomous distinction? So would they have the power to conduct entrance exams, design their curriculum and implement their own recruitment policies?

Old Wine in New Bottles?

This is certainly not a new paradigm in the country's international higher education policy. One example is the Foreign Educational Institutions (Regulations of Entry and Operations) Bill in 2010 (but it ultimately did not pass due to lack of legislative support). 

In fact, let's skim through history to see how internationalising education is not a concept that was born on July 29th.

  1. In 2000, the Government permitted FDI up to 100% through the automatic route in the education sector. This means foreign institutions can invest in education in India without government approval.

  2. The All India Council of Technical Education (AICTE) released notifications in 2003 and 2005 on entry and operations of foreign institutions imparting technical education.

So What Are the Concerns?

Though we are looking for foreign institutions to fill gaping holes evident in our educational infrastructure, we thoroughly lack the enabling mechanisms that would allow them to do much.

Bureaucratic red-taping, overbearing regulatory requirements, unprecedented delay in resource allocation (land, workforce, licenses, certifications etc.) and less-than-ideal domestic infrastructure when it comes to transportation, logistics etc. Are sure to set us back in capturing their willingness to set up shop here.

The incessant push for a philanthropic/non-for-profit model, which has only led to clever accountants bypassing the system, both through novel structures or expense mismanagement, would prove as a similar deterrent for foreign universities.

There’s a reason why major lenders don’t want to fund education projects. What possible recourse can they take when a university defaults? How to help universities accumulate huge endowment funds and manage them seamlessly? What tax incentives or structural allowances can be granted?

These are the questions to be answered...hopefully before celebrating the anticipated entry of the next Yale or Oxford campus in India!


Want more of what TRANSFIN. has to offer? How about our Weekly Quizzes? Subscribe to the Quiz Knock Newsletter and get cracking with questions on the top Business and Finance news of the week!