As India plays hard to get, overseas suitors lose interest

Indian legislation allowing foreign universities to grant degrees independently and set up full campuses in the country has met with another setback after ministers said they could not get MPs to agree to the law.

The Foreign Universities Bill has been shelved in favour of pushing through other much-needed reforms to higher education. But the delay adds to a growing sense that India is not friendly to foreign investment.

Kapil Sibal, India’s minister of human resource development and the man who introduced the legislation in 2010, said he wanted more not-for-profit foreign engagement in higher education.

“But neither UPA [the United Progressive Alliance ruling coalition] members [of parliament] nor leaders from the opposition seem to be in favour of it,” Mr Sibal said.

It is now unlikely that his department will try to get the bill through parliament during the monsoon session, which began last week.

Some UK vice-chancellors and international higher education experts said that interest in India among UK universities was now declining because of high levels of bureaucracy and because the country lacks a coherent regulatory framework.

“There’s a genuine worry about doing business in India, not just because of the bill but other regulatory activity and the difficulty of getting permits,” said John Fielden of Chems Consulting, which advises on transnational education.

Higher education in India is governed by both state and federal law, and it is both cumbersome and frustratingly slow to register as a foreign provider. Contrary to the situation in other developing markets, there are no financial incentives on offer for those wanting to set up in the country.

“Countries such as Burma [Myanmar], Kurdistan, Vietnam and Brazil are now considered preferable,” Mr Fielden added.

William Lawton, director of the Observatory on Borderless Higher Education, said: “It is a fact that some foreign universities have already decided to look elsewhere for international partnerships, and even campuses, because of the uncertainty over the bill.”

According to the Association of Indian Universities, 631 foreign institutions were operating in the country in 2010, either from their home campuses or by twinning with a local partner.

Profit restrictions a deterrent

Five had campuses in India but just one, the Schulich School of Business, was accredited. Graduates of unaccredited universities find it difficult to get government jobs or progress to postgraduate study at local public universities.

One UK vice-chancellor, who did not want to be named, told Times Higher Education that a restriction on repatriating profits was also a deterrent to setting up in the country.

“There are lots of private partners wanting to attract UK universities to India, but few institutions in the UK are willing to take the reputational risk,” the vice-chancellor added.

But Andy Heath, Asia policy officer at the UK Higher Education International Unit, said that although universities would welcome the bill, its delay was not a surprise. “The key obstacle [for UK universities] is the lack of clarity in the regulatory landscape in India,” he said.

Sir Steve Smith, vice-chancellor of the University of Exeter, argued that the delay was symptomatic of an opposition to foreign providers. “Some people in India see it as reducing their share of the market,” he said.

Currently 16 million students attend higher education institutions in India, but the government has said it wants to triple its enrolment ratio by 2020.

Karan Khemka, head of the Mumbai branch of Parthenon, a global consultancy whose clients include for-profit providers, said it was a “misperception that British universities would automatically prosper because of their quality and brand if they came into India”.

The fees charged by British universities are too high to attract students in the Indian market, he said. “They are not creating value for their students relative to the jobs and salaries their graduates can get afterwards,” he added.

Salary levels even for professionals in India are far below those on offer in the UK.

“We have heard some delusional vice-chancellors saying: ‘If they study with us they can get jobs in the UK’, but work permits are not forthcoming after a degree in India,” Mr Khemka said.

The University Grants Commission - the funding body for higher education in India - is now considering allowing institutions that feature in the Times Higher Education World University Rankings or the Academic Ranking of World Universities to collaborate with the top 100 Indian institutions to initiate accredited dual degrees.

Nicholas Booker, co-founder of IndoGenius, a New Delhi-based education consultancy, said that although the bill was delayed, there were other “innovative, cost-effective and culturally suitable ways for universities to engage in India”, including online courses and short courses by academics flown into the country.