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Regulatory Maze May Hinder Entry of Foreign Universities | India

Is the liberalization of India’s education sector a lesson in not opening the market? indrajit bath report.

IIn early January, India approved a plan to allow foreign universities to open campuses in the country as part of efforts to strengthen education and promote interdisciplinary research to boost the economy.

Last October, India also approved foreign universities to set up overseas branches within the International Financial Services Center (IFSC) of the Gujarat International Financial Tech City (GIFT). The government said these universities do not have to comply with national regulations in the field of education.

Prime Minister Narendra Modi’s ruling party has long opposed the previous government’s attempts to open up the field to foreign higher education institutions (FHEIs), with many educators advocating change during their opposition. They claimed that hundreds of thousands of Indian students (650,000 in 2022) emigrate abroad each year, spending an estimated US$3 billion annually abroad for higher education.

The lack of quality teaching and research in most Indian higher education institutions has driven these students’ decision to seek greener pastures abroad. But industry experts reasoned that if India were to open up, Indian students would benefit from world-class education from world-class universities and higher education institutions.

But while there may be light at the end of the tunnel, the tunnel seems long, and many are wondering how much impact policy will have.

“The current government has announced a National Education Policy from 2020 and has been committed to opening up the education sector to FHEI,” said Aparna Gaur, education practice leader at Nisit Desai Associates (NDA) in Mumbai. . “Already, following the 2022 Regulations on the Establishment and Operation of International Branch Campuses and Offshore Education Centers, two Australian universities have received approval to set up campuses in Gift City. ) with the draft regulation, the government has taken another step in this direction.”

Aparna Gaur

But while both moves are good approaches, “challenges still remain, and foreign universities will need to think about how to overcome these issues given the different installation conditions,” she said. added.

I have a lot of questions

Gaul said issues include taxes, the flow of foreign investment to set up campuses, and whether FHEI needs to set up a local subsidiary in India.

“India’s FHEI campuses will be subject to numerous laws, including but not limited to education, tax, foreign exchange, corporate law, employment law, environmental law, intellectual property law and local law,” she said. says. It may be impractical to inspect compliance with the set of laws that apply to FHEI, and conducting such an audit would result in significant compliance costs.

While the government provides foreign universities with complete freedom over admissions, appointment of faculty members, and structure of syllabuses and curricula without interference, the government gives the UGC, the regulator, broad powers and proposes to give veto power. Scrutinize applications made by FHEI before allowing FHEI to operate campuses in India.

For example, “no FHEI shall establish a campus in India without the approval of UGC,” the proposal states, stating that the applicant must be “in the top 500 global rankings, either overall or by subject, as determined by UGC.” We need to secure a position within the ranks,” he added. Sometimes a regulator”.

Clearly, regardless of the eligibility criteria set forth in the proposed regulations, UGC will continue to monitor the teaching and other aspects of each branch school. “In such cases, it doesn’t make much sense to impose a specific ranking on foreign universities,” Gaul said.

The proposal specifies some elements of quality assurance procedures, some of which are also unclear. These include who should do the quality assurance (commercial or accredited), quality assurance parameters, and the minimum score required for an extension to be granted, Gaur said.

“So foreign entrants will need to think twice about how to overcome these issues,” she says.

There is more to worry about. The National Education Policy (NEP) 2020 recognizes online education and open distance learning (ODL) as strategies for enhancing access, equity and inclusiveness, but the proposed regulation remains the NEP’s main concern. I have not touched on the issue of “fairness”, which is one of the matters. The proposed rule prohibits FHEI from offering online education, or open distance learning (ODL) courses.

employment prospects

This is also inconsistent with the provisions of UGC (Twinning, Joint Degree and Double Degree Programs Regulations by Academic Cooperation between Indian and Foreign Higher Education Institutions, 2022) which allows provision of online resources and ODL by joint venture programs. , said Mr. Jevanandam Rajagopal. Partner of Chennai based Fox Mandal.

Mr Rajagopal said it is important to ensure that students seeking admission to FHEI India campuses have access to online and ODL modes of education, and that even students who cannot physically go to the campuses will be able to access high-quality education. He said it was important to have access to education. “Checks and balances are needed both in terms of the autonomy given to each agency and the discretionary power of UGC,” he says.

Jivanandam Rajagopal

Rajagopal added that foreign universities should be obliged to provide job placement to both Indian and foreign companies, as one of the goals of the new policy is to prevent a “brain drain”. . Foreign recruiters should not be the only recruiters, as the proposed regulations give universities complete freedom to do what they want.

Another concern raised by experts is that education is equated with social service in this country. Supreme Court bans profit-making in educational services, allowing foreign universities to collect tuition and other fees on demand, but analysts say FHEI could benefit from repatriation I doubt whether

That is why, given that the guidelines proposed by UGC do not commit to providing physical or financial capital for the establishment of the campus, Rajat Mukherjee, partner and education expert at Kaitan & Co., New Delhi No wonder he fears top foreign universities are doing just that. Universities funded primarily by donors and taxpayers like Harvard, Yale and Oxford will not be interested in India.

“The concern is that [ability to commit the] It’s a capital expenditure,” Mukherjee said. “How many universities will invest huge sums of money to set up campuses in India? It is feared that it will take years to get a fair return on that investment.”

forward step

However, GIFT City’s IFSC scores big points in terms of delivering a fair return on investment, according to Ketaki Mehta, partner of GIFT City with Cyril Amarchand Mangaldas, CAM of GIFT City. It is said that there is The International Financial Services Centers Authority (IFSCA) has not only allowed foreign higher education institutions to set up separate campuses, but has also acted as a for-profit organization and paid fees in freely convertible currencies (other than the Indian Rupee). It was allowed to collect and remit the proceeds back to the home country. These bodies are also exempt from national regulations and will be governed only by the IFSC law and the education law of the home country of the international university or institution.

digital meter

But for Rahul Rishi, Head of Practice for the Social Division of the NDA in Mumbai, the intentions of UGC and its interaction with IFSCA are of interest. While IFSCA rules only allow courses related to financial management, fintech, science, technology, engineering and mathematics, the proposed UGC rules have no such restrictions.

“Looking through the provisions of the Foreign Currency Regulation Act of India (FCRA), the strengths and weaknesses of the proposed UGC law and GIFT regulation are interesting from a regulatory perspective,” said Rishi. “Establishing foreign campuses at GIFT is a welcome move, but it is not clear whether such campuses would be treated as ‘foreign sources’ within the scope of the FCRA.”

Nonetheless, the decision to attract foreign universities to India could turn out to be a win-win situation as well as help make India a global study destination and alleviate India’s brain drain problem. Most agree that it is a step in the right direction. Both Indian and international students are eligible.

According to the All India Survey on Higher Education 2020-21 by the Ministry of Education, India has 48,035 international students from 163 countries, with the highest percentages being Nepal (28.2%) and Afghanistan (8.4%). ), Bangladesh (5.7%), and Bhutan (3.8%). The remaining 53.9% are from the remaining 159 countries.

That aside, given that about 43% of local universities and 61.4% of universities are located in rural areas, which do not produce employable graduates, the presence of foreign universities can enable Indian companies to upskill their existing talent pool. would be “If there is a suitable university in India, it has the potential to promote educational tourism in India, similar to the United States, Canada and the United Kingdom,” said CAM’s Mehta.

Overall, India’s new policy towards foreign institutions has generated significant debate in this area, bringing both positives and challenges. Whatever the outcome, it will be the focus of attention in the coming months.

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