A Brief History of India’s Education System

Part 4E: Opening Up Higher Education to Foreign Universities

[This article is a part of a series of articles on ‘India’s Education Journey: From Macaulay to NEP’. This is the ninth part of this series. The previous articles have been published in previous issues of Janata Weekly.]

WTO, GATS and India

As discussed in a previous article in this series, most colonial countries of Asia and Africa that gained independence after the Second World War pursued autonomous capitalist development models. By the 1970s, these models had become crisis-ridden. These countries now began borrowing from the developed countries, resulting in growing foreign debt. By the early 1980s, many of these countries were trapped in an external debt crisis (similar to India’s debt crisis of 1991).

The developing countries then negotiated with the WB–IMF for debt rescheduling, and like India did later in 1991, agreed to implement the Structural Adjustment Programme (SAP) in return for fresh loans, which required opening their economies to foreign capital and goods. This marked the beginning of what mainstream economists call the ‘globalisation of the world economy’.

As has happened in India, the SAP conditionalities have only worsened the external debt crisis of the developing countries, forcing them to increasingly open their markets to foreign capital.[81]

In 1994, the developed countries arm-twisted the developing countries into signing the Marrakesh Agreements that transformed the General Agreement on Trade and Tariffs (GATT) into the World Trade Organisation (WTO). Unlike GATT, which had mainly dealt with trade in merchandise goods, the new agreements extend to trade in other sectors. One of these is the General Agreement on Trade in Services (GATS) that covers international trade in all service sectors, including education and health.

GATS allows member countries to choose which sectors to liberalise and to what extent. But once a commitment is made, it is binding and irreversible. Once a government opens up a particular service sector to foreign capital, it cannot impose restrictions on it, and additionally, must treat the foreign investors the same as domestic firms—effectively meaning that it must end all regulation of that service, even if it is an essential service like water, health or education, and privatise it.[82]

At the Fourth WTO Ministerial Conference in Doha (2001), developed countries pushed for a new round of negotiations (the Doha Round), aimed at further opening up of service sectors. The Doha Round works on the principle of “nothing is agreed until everything is agreed”, implying that negotiations for all subjects are to be concluded as a part of a single package, and cannot be agreed upon piecemeal. Fortunately, due to sharp differences among the WTO member states, especially on issues related to agriculture, the Doha talks have stalled.[83]

Despite having no obligation under WTO rules, and stalled global trade negotiations, the Manmohan Singh-led UPA Government in August 2005 voluntarily offered to open 11 sectors and 94 sub-sectors to foreign investors. This included higher education, where foreign universities were promised full access to the Indian education market, and the same treatment as that given to Indian universities—reflecting an over-eagerness to appease foreign interests.[84]

Opening Up Higher Education to Foreign Universities

Amazingly, the Indian government began opening up the higher education sector to foreign corporations even before the Doha Round of WTO negotiations. In May 2010, the UPA Government introduced the Foreign Educational Institutions (Regulation of Entry and Operations) Bill (FEI Bill) in Parliament. However, due to strong public opposition and resistance from the BJP and Left parties, the bill could not be passed and lapsed with the dissolution of the 15th Lok Sabha.[85]

Ironically, though the BJP had vehemently opposed the FEI Bill, it reversed its stance after coming to power. Media reports suggest that Prime Minister Modi took a personal interest in the matter,[86] leading to the NEP-2020 announcing the opening up of India’s higher education sector to foreign universities. It declared that India would be promoted as a global study destination, and “high quality foreign institutions” would be facilitated to operate in the country. It promised a legislative framework for this, as well as norms on par with domestic autonomous institutions (Section 12.8).[87]

Despite this announcement, no foreign universities entered India, mainly because regulations required them to operate as non-profit trusts and prohibited the repatriation of profits.[88]

In November 2023, the UGC released new regulations that removed these barriers, allowing foreign higher education institutions (FHEIs) to set up a for-profit company and repatriate profits to their home country. The new rules give the foreign universities complete freedom to do what they want. The UGC’s role is limited to granting initial permission; it will have no say in admissions (including reservations), fee structure, faculty recruitment and salaries, curriculum, assessments or governance. There will be no accreditation or assessment by any Indian body. While the NEP-2020 envisioned inviting only selected universities—specifically those among the world’s top 100—into India, the new regulations effectively grant the UGC wide discretion in giving permissions, implying that lower-tier FHEIs will be allowed entry into India.[89]

It is the first time that profit-making corporations are being allowed to establish higher educational institutions in India for profit. Until now, Indian educational institutions were required to be run by non-profit trusts or societies, and any surplus had to be reinvested in education.

Claims About Benefits of Foreign Universities

The godi media is full of praise for the new regulations permitting FHEIs to enter India. Academicians and intellectuals are hailing the Modi Government’s decision, claiming it will enormously benefit India’s higher education sector, by:

• expanding choices available to students;
• reducing the need for students to go abroad;
• increasing competition, thereby improving quality and efficiency of domestic HEIs; and
• setting international benchmarks for quality.

But the biggest myth is that higher education in the developed Western countries is primarily in the private sector. We first discuss this before analysing the above mentioned benefits of entry of FHEIs into India’s education sector.

Myths About Benefits of Entry of FHEIs

i) Higher Education in the Developed Countries

Contrary to popular belief, most developed Western countries have robust public higher education systems. In the European Union, despite neoliberal pressures, around 80 percent of students study in public institutions, and another 5 percent in publicly funded private ones. Only 15 percent are in fully private HEIs (2021 data).[90] Even in the USA—often cited as the country with the most privatised higher education system—over 77 percent of students attend public universities. Even among the private HEIs, the majority are non-profit. For-profit universities in the USA account for just 5 percent of total student enrolment in the country.[91]

Admittedly, the line between non-profit and for-profit can blur, with some non-profits effectively operating for private gain. Yet, several prestigious US institutions like Harvard and Stanford genuinely practice philanthropic financial aid. At Harvard, for instance, 55 percent of undergraduates receive need-based scholarships. Families earning below $85,000 pay no tuition, and those earning between $85,000 and $150,000 contribute no more than 10 percent of their income. Roughly 25 percent of Harvard families have total incomes less than $85,000.[92]

Another major issue with higher education in the private sector is that such institutions focus on courses for which students are ready to pay high fees, such as engineering, management and commerce, while neglecting social sciences, humanities and basic sciences—leading to a skewed, unsustainable higher education landscape.

ii) FHEIs Will Expand Student Choices

But whose choices? Foreign universities are going to enter India to make profits, not to offer affordable education. It is only after the UGC allowed for-profit foreign entities full autonomy in fee-setting and profit repatriation that they have shown an interest in entering India. Their fees will be prohibitively high—only the children of the super-rich will benefit. Therefore, entry of FHEIs will increase the choices for these students only. For the vast majority of Indian students who can’t afford the fees of even private Indian HEIs, these institutions are going to offer no additional choice.

iii) FHEIs Will Reduce the Need to Study Abroad

PM Modi claimed in his 2024 Independence Day speech that the education reforms aim to eliminate the need for students to go abroad to study.[93] But this misses the real issue facing our higher education system: how to make it easier for our students to access higher education. India’s higher education GER is low—around 30 percent—and far below global standards. This is largely due to inadequate public funding and rising fees, which has made higher education inaccessible for children from the marginalised groups. Unfortunately, there is no mention of this issue both in the Prime Minister’s speech and the NEP-2020.

iv) FHEIs Will Raise Quality Through Competition

It is a myth that competition among private institutions improves quality. The best universities in the world—especially in Europe—are all public. A UNESCO report says: “Non-state elite institutions are the rarest type of non-state institution. In most countries, public universities enjoy the highest prestige.”[94] The USA is the only exception. It has several iconic private universities like Harvard and MIT (it has many prestigious public universities too). But they are all non-profit and philanthropic.[95] Assuming that global rankings are indicative of the quality, with the exception of these non-profit private universities in the US, no other private university in the world features in the top 300.[96]

Since for-profit HEIs seek to maximise profits, they often engage in fraudulent practices. The UNESCO report cited above notes that private for-profit HEIs have indulged in “deceptive business practices, including predatory recruitment and fraudulent marketing strategies.” In the USA, 7 of the 10 largest for-profit universities have been found to have indulged in such practices.[97]

India’s own experience also proves this. The best higher education and research institutions in India—the IITs and IIMs, AIIMS, JNU, Delhi University, Indian Institute of Science, TIFR, BARC, ISRO and IUCAA—are all in the public sector. While it is true that some of our public HEIs have seen a decline in their quality in recent times, this is due to shrinking government funding and increased ideological interference (we discuss this in the next section). Therefore, what is needed for improving their quality is more funding and academic autonomy, rather than handing over the sector to for-profit foreign players.

v) Entry of FHEIs Will Benchmark Quality

This claim assumes that top-tier foreign universities intend to enter India. But as noted earlier, most of these institutions are in the public sector and unlikely to open campuses abroad. Philip Altbach, the renowned American educationist, observes:

Institutions using the term “American” and often teaching in English are proliferating throughout the developing world, joined recently by institutions with “German,” “French,” or “Canadian” in their names…. Many are sleazy recruiters, degree packagers, low-end private institutions seeking to stave off bankruptcy through the export market …[98]

Therefore, it will only be the lower-tier universities offering low quality programmes that will be eager to tap into India’s large market, taking advantage of the lax regulations.

It is possible that a few top-ranking universities may establish campuses in India. But as Altbach points out, they will do so primarily because government funding cuts in their home countries are forcing them to enter foreign markets to make profits. Because of this, even elite institutions have set up dedicated arms tasked with raising funds from abroad. However, as a Task Force set up jointly by the World Bank and UNESCO acknowledges, the offshore campuses of prestigious universities in developing countries often offer education of much lower quality than their parent institutions.[99]

We conclude this discussion on the myths surrounding foreign universities with a quote from J.B.G. Tilak, the eminent Indian educationist:

There is no evidence of any developing country having prospered educationally or economically by relying on foreign universities. In fact, the evidence is abundant to show that strong and vibrant higher education systems are built mainly by the governments and with public funds.[100]

Foreign Universities Setting Up Campuses in India

News reports say that several foreign universities are exploring possibilities of setting up campuses in India. Two Australian universities—Deakin University and the University of Wollongong—have already established campuses in Gujarat’s GIFT City, and the U.K.’s University of Southampton has done so in Gurugram, near Delhi. Philip Altbach, in a recent article, points out that these are not top schools in their home countries, and expresses concern about their “disproportionate reliance on marketing strategies—digital campaigns and branding exercises—often at the expense of academic investment.”[101]

This is globalisation in operation. Seven decades after we won our independence through the sacrifices of millions of our people, Delhi’s Moghuls are once again allowing foreign corporate armies to impudently enter the country and trample over even our most sacred spaces, the ‘conscience of the nation’, our universities.

Notes

81. For a more detailed discussion of this issue, see our publications: Neeraj Jain, Globalisation or Recolonisation?, Lokayat publication, October 2006, https://lokayat.org.in.
82. Ernesto Screpanti, Global Imperialism and the Great Crisis: The Uncertain Future of Capitalism, pp. 109–113, https://books.google.co.in; Erik Wesselius, Behind GATS 2000: Corporate Power at Work, Transnational Institute, Netherlands, 2002, http://www.tni.org.
83. Eva Cheng, “World Trade Organisation: Agricultural Talks Enter Crucial Stage”, Green Left Weekly, July 9, 2003, https://www.greenleft.org.au; Prabhat Patnaik, “Imperialism’s New Trade-Negotiating Strategy”, People’s Democracy, Vol. XXXIX, No. 51, 27 December 2015, http://peoplesdemocracy.in.
84. J.B.G. Tilak, Trade in Higher Education: The Role of the General Agreement on Trade in Services (GATS), UNESCO: International Institute for Educational Planning, Paris, 2011, p. 108, http://unesdoc.unesco.org.
85. J.B.G. Tilak, “Policy Crisis in Higher Education: Reform or Deform?” Social Scientist, Vol. 38, Nos. 9–12, September–December 2010, p. 65, http://thechalkcorner.wordpress.com; Ritika Chopra, “PM Narendra Modi to Discuss Topic of Allowing Foreign Universities to Set Up Campuses in India”, ET Bureau, June 9, 2015, http://economictimes.indiatimes.com.
86. Ritika Chopra, ibid.
87. NEP, op. cit., p. 39.
88. Debdutta Choudhury, “Foreign Direct Investment (FDI) in Indian Higher Education: A New Beginning”, 15 January 2025, https://blog.efmdglobal.org.
89. Ibid.; “View: UGC Rules for Foreign Universities in India Mark the Beginning of For-Profit Education in the Country”, 12 January 2024, https://economictimes.indiatimes.com; Binoy Viswam, “Modi Govt’s Offer to Foreign Universities to Set Up Campuses in India Not in National Interest”, 12 January 2023, https://www.nationalheraldindia.com; University Grants Commission (Setting up and Operation of Campuses of Foreign Higher Educational Institutions in India) Regulations, 2023, https://www.ugc.gov.in.
90. Students Enrolled in Tertiary Education by Education Level, Programme Orientation, Sex, Type of Institution and Intensity of Participation, 12/12/2024, Eurostat (educ_uoe_enrt01), https://ec.europa.eu/eurostat.
91. Global Education Monitoring Report 2021/2: Non-State Actors in Education: Who Chooses? Who Loses?, UNESCO, 2021, p. 179, https://unesdoc.unesco.org; “COE – Undergraduate Enrollment”, National Center for Education Statistics, https://nces.ed.gov.
92. Financial Aid Fact Sheet, Harvard College, https://college.harvard.edu.
93. “PM Modi’s I-Day Speech 2024 Unveils Plan to Make India a Top Education Hub …”, 15 August 2024, http://timesofindia.indiatimes.com.
94. Global Education Monitoring Report 2021/2: Non-State Actors in Education: Who Chooses? Who Loses?, op. cit., p. 164.
95. Lester M.M. Salamon (edited), The State of Nonprofit America, p. 138, 2012, http://books.google.co.in.
96. J.B.G. Tilak, “Private Higher Education in India”, Economic and Political Weekly, Vol. 49, No. 40, 4 October 2014, http://www.epw.in.
97. Global Education Monitoring Report 2021/2: Non-State Actors in Education: Who Chooses? Who Loses?, op. cit., p. 173.
98. Philip G. Altbach, The Subprime Market & International Higher Education, 2008, http://www.cautbulletin.ca.
99. Angela C. de Siqueira, “The Regulation of Education Through the WTO/GATS”, Journal for Critical Education Policy Studies, March 2005, http://firgoa.usc.es; J.B.G. Tilak, “Policy Crisis in Higher Education: Reform or Deform?” op. cit., p. 66.
100. J.B.G. Tilak, “Policy Crisis in Higher Education: Reform or Deform?” ibid., p. 67.
101. Philip G. Altbach and Eldho Mathews, “Boom in Foreign University Branch Campuses: Can They Deliver Quality Education?”, 26 May 2025, https://www.thehindu.com.

[Neeraj Jain is a social activist and writer. He is the convenor of Lokayat, an activist group based in Pune. He is also the editor of Janata Weekly, India’s oldest socialist magazine. He has authored several books, including Globalisation or Recolonisation?, Education Under Globalisation: Burial of the Constitutional Dream, Nuclear Energy: Technology from Hell, and most recently, Union Budgets 2014-24: An Analysis.]