Foreign Educational Institutions Bill

The Union Cabinet has Okayed the Foreign Educational Institutions Bill which allows foreign universities to open campuses in India. This bill would now be passed by the Parliament. Government says that the intent of this bill is to curb outflow of Indian students and money towards foreign countries (In 2008-09, 2.25 billion USD went out of India to fund Indian students studying abroad).

As such the bill looks good. It allows foreign universities either alone or in collaborations with local universities to offer programs in local campuses, just like any other private institution. Such universities would not have to implement any caste-based quota and can decide on whatever fee they want to charge. As a check, such universities can’t take back any profits earned out of India. Still, I doubt the success of the scheme towards its goals of stopping outflow of Indian students and Indian money abroad.

Firstly I doubt if the best of the foreign universities would be inclined enough to set up local brick and mortar campuses in India. The reason is that their foreign mother institutions depend heavily on Indian and Asian students filling up their seats (very critical in recession times too). If they start local campuses, they miss such students and hence money reaching up to them. I fear only the rank-B foreign schools would come to India. And these institutes would not stop the outgoing students. When one decides to join a foreign university, money or class room education is not the only things in mind. One goes to get a global exposure, studying with diverse set of students from all across the world. Such local campuses of foreign universities would not fulfil this very important expectation from the students. And then there would be concerns about quality of education and exorbitant fee being charged without getting back enough values in return. The cream of Indian talent still prefers IITs or IIMs over many foreign universities, unless they have intent to settle abroad. The students who have money but are not talented enough to get into IITs/IIMs, go for foreign universities for higher education. Such students would still go abroad. Also, the students who have intentions to settle abroad after studies would still go join the foreign universities rather than their local campuses because that is the shortcut to their goals. For the clause of not allowing profits to be taken out of India, they always can get creative to utilise the money in ways of self-fulfilment, like funding student exchange programs, funding training and research of their global counterparts, and in many other ways, not allowing this clause to harm their interests. On the other hand, I fear such local campuses of not-the-best foreign universities would be harming interests of Indians in more ways than one.

The high fees of such local units of foreign universities would definitely result in Indian private universities hiking their fees too, claiming their own standards being no less than those. Then, such universities would eat up some market share out of Indian universities, in terms of talented faculty members and quality students. Also, it would be very difficult to ensure that their courses are best designed for Indian environment; otherwise we would end up creating misfits.

I doubt if the government has thought enough around the bill before pushing it to the parliament. I am not sure if the time is right for such a bill too: the newer IITs and newer IIMs are still to establish grounds. If the education reforms are continued, and quality education is ensured by proper regulation, I think this bill may be welcomed after 10 years from now. In the present times, such a bill would harm our interests and would fell short of its target of stopping expatriation of Indian students and money.

- Rahul