The University Grants Commission (UGC) recently released the much-anticipated regulatory framework allowing foreign universities to set up campuses in India. This framework permits foreign universities listed in the top-500 global rankings, or subject-wise rankings, or possessing outstanding expertise to set up campuses in India upon obtaining UGC approval.
The regulations walk the talk on the vision statements of the National Education Policy (NEP) of the Government of India but what they do not spell out is where a lot of thinking is needed and likely where most creativity will be seen. Foreign universities looking to use this route should consider three fundamental questions: how to fund the India campus, what degree outcomes can be delivered, and whom to partner with.
Funding
Funding will be crucial at the time of setting up and for continued viability of the campus. The good thing is that funding is left almost entirely to the discretion of the foreign university. The regulations require information on financial adequacy but do not prescribe permitted sources, structures, etc. This means foreign universities could explore private sources of capital, domestic or foreign. If foreign investment into online higher education and adult learning is an indicator, there seems to be enough capital chasing assets in this space and the regulations’ non-interventionist approach opens these avenues of funding. The regulations are also silent on use of local entity, not-for-profit or otherwise, implying that any form of entity is possible. The not-so-good thing is that unlike Gift City, foreign universities will be subject to Indian foreign exchange norms and Foreign Contribution (Regulation) Act, 2010 (FCRA). So, if they choose to set up an Indian entity, foreign exchange norms will need to be complied with. FCRA, if applicable, would complicate matters given difficulty in obtaining permission and restrictions on use of funds. Most foreign universities will try to overcome such hurdles by creating holding structures which allow easy fund flow, not to forget tax efficiency.
Degree Outcomes
The regulations give a lot of attention to quality control and the formula to achieve this is to require that Indian campus is treated “at par” with the home campus. Every foreign university is required to ensure that degrees awarded to students at Indian campus are “at par”, i.e., they enjoy the same recognition, status and equivalence as if awarded at the home campus. The at-par formula is the right approach but unfortunately this legal fiction can only go so far. What students will want most from their degree is job-parity and yet they may be several steps removed from established job networks of foreign university and significantly behind on immigration if that is the end-goal. When it comes to access to jobs and market acceptability, could there be a like-for-like comparison between foreign degrees and those awarded by Indian campuses? There is, understandably, no easy answer. But it raises an important question that foreign universities need to think about – are they offering international mobility or better jobs right here in India.
Partners
The provision allowing foreign universities to enter joint ventures with Indian universities or companies is a novel idea, even radical. It could have a transformational impact as it will allow Indian companies to participate in higher education market rather than watch from the sidelines and it corrects an imbalance that would have resulted if Indian universities were excluded from this regime. From the foreign universities’ perspective, considering the enormous capital required to start a campus and long wait to reap returns, it makes sense to find the right partner who can bring financial stability such as private equity-backed educational companies. In addition to funding, foreign universities will need to consider various elements when looking for partners, such as student leads, access to quality local faculty, job-placement capabilities and other forms of synergy, which would be equally critical to success. Luckily, with Indian universities competing to add an international dimension and online education companies eager to expand into offline, they will find a lot of options to choose from.
Only time will tell how foreign universities use this regime and what it means for the Indian market. For now, it’s fair to say that with an enabling framework that leaves room for imaginative thinking, the UGC may have set higher education on a promising new course.
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