The government has finally given its approval to the Entry and Operations of Foreign Educational Institutions Regulations, (Quality Maintenance and Prevention of Commercialization) Bill 2010 (“Bill”). The bill seeks to regulate the entry, operation and restriction of foreign universities in India. However, shortly after the Union Cabinet approved the long-pending bill allowing foreign education providers to set up campuses in India and offer degrees independently, most Indian opposition parties objected. the bill, calling it “commercially driven” and that it would create inequality. As long as the opposition remains concerned about issues such as degree equivalence/parity, fee structures, and fairness in terms of access for all students, getting the bill through Parliament looks difficult.

Although the current FDI policy allows 100% foreign investment in the education sector, including higher education, foreign universities are currently not allowed to directly offer degree courses in India. It is estimated that about 150 foreign institutes offer courses with Indian universities under a twinning agreement, that is, a part of the course in India and the rest abroad, but most of them do not have all the required accreditations from the organizations. regulators. Existing arrangements are regulated by the Technical Education Council of India Regulations for the Entry and Operations of Foreign Universities in India Providing Technical Education, 2005 (“Foreign Universities Regulations”), which currently applies only to technical institutes and management.

Some of the reported provisions that are part of this bill approved by the Union Cabinet include:
• Different levels of registration process to register with the University Grants Commission (“UGC”) or any similar regulatory body. Subject to the necessary approvals from the UGC, a foreign university could be registered as a “deemed university” under the relevant provisions of the University Grants Commission Act 1956.
• Interested foreign universities must deposit a capital fund of INR 50 crore (approx. US$ 10 million);
• Such foreign universities would be established as “not for profit” companies under Section 25 of the Companies Act and therefore cannot recover profits. Similar provisions apply to private Indian universities, and universities deemed to be for-profit activities in the education sector are frowned upon by regulators;
• Foreign universities may, however, provide consultancy services, faculty development, and other similar activities, and profits generated from such projects may be repatriated. Indian private universities are adopting similar structures;
• a time-limited process for granting approval to foreign educational institutions to establish campuses;
• scrutiny of proposals from aspiring institutions on the basis of their previous experience, faculty staff, reputation, etc.;
• Quota laws that provide reserves for Scheduled Castes, Scheduled Tribes and other backward classes may not apply to foreign universities establishing campuses in India.

It is indicated that a number of foreign institutes are already interested in establishing campuses in India and these institutes are watching the recent development with great interest. Therefore, the legislation of the bill would open up a huge market for international educational institutions and collaborations with Indian universities.

The bill, once finalized and enacted, is expected to attract large foreign investment in the Indian education sector and support the Indian government in its commitment to increase public-private participation in the education sector and raise the rate of attendance at college to 30 percent by 2020 compared to 12 percent of all college-going high school dropouts. It is also claimed that this will put India as a “preferred destination for education” on the global knowledge map as it will not only reduce the number of Indian students pursuing higher education (estimated at 1.6 lakh of Indian students each year with an outflow of around 7.5 billion foreign exchange per year), but would also attract foreign students from southeastern countries.

In addition to this, it is also expected to create new business opportunities for educational players in India and new and better job opportunities for teachers, administrative and technical staff.

While the bill is likely to benefit Indian students by increasing the options currently available to them and assisting in the overall development of the education system in India, especially the higher education system, several unanswered questions remain, such as the lack of regulatory clarity and the level of government inference, lack of an independent regulator (non-government body), compliance with mandatory infrastructure and campus development requirements, flexibility in setting fees, taxes, closure of universities, etc.

In the absence of the actual bill being publicly available (it will be available once it is tabled in Parliament), the above views are based on the previous publicly available version of the bill and on recent public discussions of the bill. .

Seema Jhingan
[email protected]