It's not Ivies, but midlevel universities that will come

When the Indian education minister (HRD minister Kapil Sibal) spoke last autumn of inviting overseas education providers to set up campuses in the country, he mentioned the likes of Harvard, Yale and Oxford. But six months after India’s top ministerial body approved a draft law to open the country to foreign education institutions, it is clear that the world’s top universities are not ready to plunge into the vast higher-education market in India.

Instead, the proposal before lawmakers is more likely to attract midlevel schools — still far superior to the average Indian education provider — while excluding fly-by-night operators, according to educators who have advised the human resource development ministry, which oversees education.

“There is a high level of interest only from the Tier 2 institutions to do things in a serious manner,” said M Anandakrishnan, chairman of one of the branches of the government-financed Indian Institute of Technology. Some of the names in this category are the Georgia Institute of Technology, the Virginia Institute of Technology, Carnegie Mellon University in Pittsburgh and the Schulich School of Business in Toronto.

The so-called Tier 1 institutions “are simply not interested in setting up a campus here,” Anandakrishnan said. Georgia Tech says it is planning to set up a research facility in  Hyderabad in partnership with Infosys Technologies. According to a statement, the university hopes the passage of the proposed legislation will allow it to start offering master’s and doctoral degrees in India.

Carnegie Mellon University is helping Punjab to plan courses at a new university, while Virginia Tech and Schulich have lined up Indian partners and have announced plans for new campuses near Chennai and in Hyderabad, respectively.

While a final vote by parliament on the legislation has yet to be scheduled, colleges are already making plans, anticipating they will find an eager and substantial audience, consultants say.

“Fundamentally, it is a big education market,” said H V Harish, who is advising education providers about how to enter India. “There are people who spend money. The target market for these types of universities is people who can afford an overseas education but do not want to send their kids overseas. People from business families.”

The market does not end there, say some of the midlevel colleges and universities that have already entered India through partnerships with Indian universities. The British University of Wolverhampton, for instance, is reaching out to working professionals — junior to midlevel managers who have a few years of experience. It plans to teach business courses through its Indian partner, Bishop Heber College, in  Tamil Nadu, and is happy with this arrangement.

“I think the Indian government now is more receptive to foreign universities’ setting up in India,” said Jo Gittens, director of the university’s international office. “We don’t have any overseas campuses. It’s something we haven’t taken up as a strategy because we feel we have good-enough partnerships.” But, she added, “it’s certainly not out of the question.”

The Schulich School of Business also started out with an Indian partner. In January of this year, it started a joint master of business administration degree programme with Mumbai’s S P Jain Institute of Management Research. But even as it began this partnership, it was in advanced talks with the GMR Group, a consortium of mostly infrastructure companies, to set up an independent campus in Hyderabad.

Ashwin W Joshi, executive director of the Schulich MBA programme in India, says there is strong demand in India for a top-quality MBA programme, which the school plans to start offering by 2013.

People who can afford

“There are people who are incredibly bright and people who can pay,” he said. Joshi believes there are “tens of thousands” of people who can pay the more than $24,000 in annual tuition fees that international students pay when they go to Schulich.“I don’t have any doubt that there will be any shortage of demand at these price points.” He could be right. The privately run Indian School of Business, also in Hyderabad, charges $35,000.

While there may be a large market, the bill now before lawmakers prohibits repatriation of profits. Furthermore, those wanting to set up campuses must deposit more than $10.5 million with the government. The proposed law also requires that institutions have at least 20 years of teaching experience in their home countries. Officials will have the power to exempt applicants from some conditions, but not the one banning providers from taking profits out of India.

“Genuinely good institutions are not interested in taking out profits,” said Pawan Agarwal, a former education ministry official. “They want a global footprint.” That is what several midlevel entrants have in mind as they size up their prospects in India.

Institutions that have firmed up plans to start or expand operations in India say that while they may not see profits for years, having a presence in India — no matter how small — helps to draw students.

Glenn Withers, president of Universities Australia, a group that represents 39 institutions, said, “An overseas campus is a better option to internationalise education for Australian students.”

Jo of the University of Wolverhampton agrees. Partnerships “are not just about joint delivery — they are about internationalising our staff,” she said. Although Indian government now does not see the Ivy League rushing to enter the Indian market, officials at some Ivy League schools have confirmed plans to increase their presence, no matter how small. Brown University in Providence, Rhode Island, has decided to open an office in India, either in New Delhi or in Mumbai.

“This is something we’ve just decided on,” said Matthew Gutmann, Brown’s vice president for international affairs. Earlier this year, Columbia University in New York opened its fourth global centre for research and regional collaboration in Mumbai, even though it does not have plans to open a separate campus in India.

“We’ve created a centre that’s independent of any joint degree programme,” said Kenneth Prewitt, Columbia’s vice president for global centres. However, the university’s experience suggests that an initial step like this one might lead to joint degree programmes, he said, adding it was a possibility that the same could happen in India.

This is what HRD minister Kapil Sibal and other backers of the draft law have learned and are now emphasising as it awaits parliamentary action. After the initial talk about the impending arrival of the Ivies — Sibal is a Harvard Law School graduate — “he is beginning to realise that it is not going to happen all of a sudden,” Agarwal said.