NEWSLETTER

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India Opens Its Doors To The Global Higher Education MarketSeptember 11, 2013 Sannam S4, which supports over 60 international education customers in India, is cautiously excited about news widely reported this morning in the Indian newspapers that foreign universities will be allowed to establish a campus in India, to operate independently and to issue foreign degrees locally. While this may not be in the plans for all institutions, it is certainly something to keep an eye on, as it will potentially have a big impact on student recruitment, research collaboration and the local public perception of foreign education providers.

We should point out that no official ‘notification’ has been issued by the Government of India yet. However, there is enough detail to suggest that this news has substance. So, a bit more detail. The Government of India, through the University Grants Commission (UGC) Act, is aiming to establish rules that will enable foreign universities featuring in the top 400 in The Times Higher Education Ranking, QS Ranking and Shanghai Jiao Tong University ranking to set up campuses and offer degrees in India without a local partner.

In order to pursue this, it appears that institutions will have to:

nn Seek UGC (University Grants Commission) approvalnn Establish degree equivalency, as determined by the Association of Indian Universities (AIU)nn Operate using a Section 25 (not for profit) company under the newly formed Companies Act 2013nn Deposit INR 25 crores (around USD 3.8 million/GBP 2.5 million in the current foreign currency exchange environment)

The picture above is of Nalanda University, a centre of learning established in India in the 5th century. Nalanda was one of the world’s first residential universities.

NEWSLETTER

NEW DELHI | MUMBAI | BANGALORE | CHENNAI www.sannams4.com

This provides an exciting dimension for foreign institutions wanting to deepen their engagement with India. That said, will there be a rush of institutions wanting to set up shop? Key headaches that they will face include:

nn Navigating the mechanics of setting up a Section 25 and obtaining the necessary approvalsnn Land acquisition/real estate, considering the restrictions placed under the recent Land Acquisition Act

passed by the parliamentnn How to repatriate profits back to the country of origin, especially where the suggested operational

model in India is not for profit (Section 25 Company)nn Safeguarding the name and reputation of the institutionnn Identifying sufficient quality facultynn Managing the quality of education within the financial parameters that existnn Creating a sustainable financial business model.

Separately, you may also be wondering whether this might impact the number of students travelling abroad for their education. Our view is that, for the foreseeable future, there will always be a population of students (and parents) who wish to pursue an education overseas. South East Asia and the Middle East which are way ahead of India in onshore international education provision remain markets for mature recruitment destinations including the UK, US, Australia and Canada.

So, lots to think about. As always, the devil will lie in the detail. The next step is to wait for formal news from the Ministry of Human Resources Development. Sannam S4 has held several calls with them on behalf of our existing clients already and we expect to be notified as details are released. If this is a topic on your watch list and you would like to discuss it further, Sannam S4 would be delighted to help. We have a unique combination of skills to advise both from an education perspective and also on the mechanics of starting a new venture in India.

If you would be keen to hear more about this and want to participate in our forthcoming webinar on these developments, please email us at education@sannams4.com

Please contact Lakshmi Iyer, Head of Education at lakshmi.iyer@sannams4.com or Kapil Dua, Director of Financial Consulting, at kapil.dua@sannams4.com for further information.

One final thought. In case you were wondering, if the new rules come to fruition, this effectively renders the long discussed Foreign Education Providers Bill of 2010 irrelevant. Given the level of uncertainty created by this Bill, these new rules have to be a positive development.

For further details on our full range of services to support international education institutions in India, visit our website at www.sannams4.com.

Lakshmi Iyer Head of Education

Kapil Dua Director of Financial Consulting