India/November 10, 2022/By: Hogan Lovells, William Ferreira and Adilene Rosales/Source: https://www.jdsupra.com/
The past few months have seen significant developments in India’s higher education sector. For decades, non-Indian institutions have asked: Will India ever be hospitable to foreign investment in India’s education system? And for decades the outlook was grim – Indian regulators actively discouraged foreign universities from opening branch campuses or on-ground academic programs in India. But attitudes have shifted, and the Indian education market is now “open for business” in an unprecedented way. We summarize below the main developments.
In August, India’s Ministry of Education initiated conversations with various top-ranked universities around the world to establish branch campuses in India. The primary higher education regulator – the University Grants Commission (UGC) – is in the process of preparing guidelines for such campuses in India. Much rides on how the UGC elects to address such issues as tuition, tax, and regulatory oversight. But such campuses are anticipated to have full freedom to develop curriculum and appoint faculty. This kind of academic autonomy for non-Indian institutions seeking to operate degree programs in India would be unprecedented.
GIFT city campuses
In October, the Gujarat International Finance Tec-City (GIFT) – which is about 300 miles north of Mumbai – issued regulations on establishing and operating “International Branch Campuses” (IBCs) of foreign universities and “Offshore Education Centres” (OECs) of foreign educational institutions in GIFT City. The regulations are characterized as “light touch” – very surprising for education regulation in India – allowing direct operations of foreign institutions subject to specific conditions. The conditions include:
- A foreign university seeking to establish an IBC must be within the Top 500 in the QS World Universities rankings, either in overall or subject ranking. A foreign educational institution seeking to establish a OEC must be a reputed institution in its home jurisdiction.
- Prior to commencing operations in GIFT City, foreign institutions must register with and obtain approval from the International Financial Services Centres Authority (IFSCA). Upon obtaining in-principle approval from the IFSCA, the foreign institution has 180 days to set up the required infrastructure and staff the IBC or OEC. The IFSCA then may issue a Certificate of Registration valid for 5 years and renewable every 5 years.
- The degree, diploma, or certificate conferred on students must be recognized in the foreign institution’s home jurisdiction, and must be equivalent to the degrees, diplomas, or certificates conferred in the home jurisdiction.
- Permissible subject areas include Financial Management, FinTech, Science, Technology, Engineering, and Mathematics.
- The parent entity is permitted to repatriate profits, if any, without any restrictions.
Collaborative degree programs
In May, the UGC issued collaboration regulations that expressly permit twinning, joint, and dual degree programs between Indian institutions and foreign institutions (see here). The regulations provide minimum standards for international collaborative degree programs with Indian universities, such as:
- Twinning Programs: students enrolled with an Indian institution can undertake their program of study partly at a foreign institution (provided the credits earned at the foreign institution do not exceed 30% of the total credits for the program), and the degree can only be awarded by the Indian institution.
- Joint Degrees: the curriculum is designed jointly by the Indian and foreign institution and a single degree is awarded by both institutions; students must earn at least 30% of total credits from each of the Indian and foreign institution without overlapping of course content/curriculum.
- Dual Degrees: the program is jointly designed and offered by the Indian and foreign institution in the same subject area and each institution separately and simultaneously awards a degree upon completion of the requirements of both institutions; credits for courses in an institution count toward degrees to be awarded by both institutions.
- Degrees awarded under these regulations will be equivalent to, and will have all the benefits, rights, and privileges as, any degree awarded by an Indian institution ordinarily, and there will be no further requirement to seek equivalence from any authority in India.
- For all programs, the Indian institution must obtain approval from its governing authority for academic collaboration with a foreign institution. Approval is also required from relevant Indian statutory councils/bodies for professional programs (e.g., technical, medical, legal, agricultural, etc.).
- The Indian and foreign institutions must execute a written Memorandum of Understanding or Agreement which must include certain provisions specified in the regulations. Importantly, disputes arising under collaborative arrangements between Indian and foreign institutions must be governed by Indian law.
- The programs offered under these regulations must be offered primarily in-person and are not permitted to be offered online or via open and distance learning (ODL).
Drawing faculty from industry
In September, the UGC issued guidelines for Indian institutions to hire industry experts as “professors of practice” in colleges and universities. This new measure aims to promote the vocational and skill-based education needs of the Indian economy, and to bring industry and professional expertise into Indian academic institutions
Foreign exchange students in India
In September, the UGC issued guidelines permitting Indian universities to admit up to 25% additional students as foreign (non-Indian) students in local undergraduate and postgraduate programs. In contrast to previous requirements, these international students would not be required to undertake an admission test to enroll with the Indian institution. Admissions instead will be based on equivalence of entry qualifications (to be determined by a regulatory body ). The guidelines are available here.
Indian Institutes of Technology
In August, a Ministry of Education committee recommended that Indian Institutes of Technology (IITs) be permitted to start campuses outside India with their IIT brand name. The IITs are among the most prestigious STEM institutions in the world. The committee recommended that IITs focus on areas such as Computer Science and Information Technology, Data Science, Artificial Intelligence, Machine Learning, Robotics, Electronics, Mining, Petroleum, and Energy.
Foreign direct investment
India’s Minster of Education recently announced that India will seek to attract foreign investments “from everywhere” into India’s education sector. The Government is looking to foreign investors to build local capacity and infrastructure within India. But as with all Indian invitations to investors, certain “guidelines” are in development to ensure that India is not unduly “exploited” by foreign players.
Online education programs
In June, the Indian government launched Polyversity – a virtual institution that simulates the presence of multiple academic institutions. For the time being, India remains open to foreign education institutions offering online education programs into India; however, Indian regulatory authorities will not recognize non-Indian degrees or certificates earned online. Institutions must carefully consider Indian tax, data privacy, consumer protection, and related requirements for online education programs.
Taken together, these new opportunities in India’s higher education sector are extraordinary — almost unthinkable just a few years ago. But all seasoned lawyers know that India remains an extremely complicated jurisdiction, especially in tax, employment, and education regulatory matters. As with all initiatives into India, institutions should proceed with caution and only after seeking specialist advice.
We thank Aarushi Jain, Head of the Education Practice, and Aniruddha Majumdar, senior member of the Education Practice, at Nishith Desai Associates, for their support and contribution to this article.