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Foreign universities set to storm fortress India

Rumours are rife that under cover of the World Trade Organisation accords and the General Agreement on Trade in Services, cash-strapped western universities and educationists steeped in the art of infotech empowered pedagogies are massing to invade India, widely perceived as the world’s largest market for higher education. Dilip Thakore investigates

A shiver of apprehension is snaking its way through the
somnolent groves of Indian academia, particularly through the nation’s 15,600 colleges and 311 universities which inject over two million far-from-industry-ready graduates annually into the bloodstream of the economy. Rumours are rife that under cover of the World Trade Organisation (WTO) accords and the General Agreement on Trade in Services (GATS), cash-strapped western universities and educationists steeped in the art of infotech empowered pedagogies are massing to invade India, widely perceived as the world’s largest market for higher education.

This growing apprehension within Indian academia is being fuelled by the large number of recce delegations led by top-level foreign academics who have been making whirlwind tours of Indian metros in recent times. For instance during the past two months, apex level academics from Yale, Stanford, and Middlesex (UK) universities and CIE (the Council for International Examinations, UK) — all featured in EducationWorld — visited India to study the topography and scout for students, tie-ups and collaborations. With India’s existing higher education system able to absorb only 6 percent of youth aged 18-24, the demand for high quality, internationally benchmarked education — especially English medium instruction — is exploding, particularly within the nation’s fast-expanding 150-200 million middle class.

The government of India’s legal position under the WTO accords to which it is a signatory and GATS which is a subsidiary protocol under WTO, is a grey area. Several schools of opinion have differing interpretations of India’s obligations under GATS which governs reciprocal trade in 12 services including education. Some experts believe that under GATS, India is obliged to allow foreign education service providers free access into this country failing which countries denied access (e.g the US) can stymie Indian service exports (e.g software services) until the dispute is resolved by the WTO appellate tribunal. A second school of opinion believes that India is entitled to impose stiff conditions and requirements which would discourage foreign education institutions from offering their services in this country. And the dominant view is that under the WTO accords to which GATS is subsidiary, India is obliged to negotiate reasonable terms and conditions under which offshore education institutions can enter the domestic education marketplace.

Jayagovind: strict conditionalities
Dr. A. Jayagovind, director of the National Law School of India University (NLSIU), Bangalore widely regarded as the country’s premier institute of legal education, believes that the public confusion over this issue which neither the Union human resource development ministry nor the University Grants Commission (UGC) have cleared up is understandable. "The World Trade Organisation which is founded on the premise that incremental international trade is beneficial to all people globally, administers 17 agreements including GATS. Education is one of the 12 services in which international trade is encouraged by WTO in the broader interest of people everywhere. Other services include financial, legal, health, construction and engineering, tourism etc. WTO encourages bilateral negotiations on these issues with the proviso that agreements concluded bilaterally between member signatory nations must have multilateral effect," explains Jayagovind.

According to Jayagovind, the provisions of GATS are "very elastic and flexible" and offer WTO member nations considerable room to impose strict terms and conditions upon offshore service providers. Indeed he is of the opinion that foreign providers of education should be subject to strict conditionalities to preserve cultural integrity and prevent accentuation of the "rich-poor divide" in Indian education, especially higher education. "It’s very important for India’s cash-starved universities and colleges to be first made viable and self-sustaining so that they can withstand foreign competition. While this is being done inter alia by raising college and university fees reasonably, admission of foreign education service providers should be conditional and carefully regulated, preferably by an independent regulator appointed to implement the judgement of the Supreme Court in the TMA Pai Foundation Case," says Jayagovind, a law alumnus of Madras University who was awarded his doctorate by the Jawaharlal Nehru University, Delhi and who taught law at Sokoto University, Nigeria before signing up with NLSIU in 1988.

Jayagovind’s counsel for caution is hardly surprising. Long accustomed to heavy government subsidisation and regulation of higher education, it is difficult for Indian academics to accept the prospect of well-endowed and well-equipped foreign universities setting up campuses in this country and cutting the ground from beneath their feet. They are conditioned — as was Indian industry prior to the liberalisation of the economy in 1991 — to believe that India’s academic institutions cannot withstand the cutting edge competition from well-funded foreign education providers.

Therefore leaders of Indian academia are quick to advance arguments such as accentuation of the rich-poor divide, unlevel playing field etc to prevent the entry of foreign education providers into India’s booming education marketplace. The de facto entry of foreign education service providers such as the United World College, the US-based Presbyterian Church (which runs the Woodstock and Kodaikanal International schools), foreign examination boards such as the International Baccalaureate Organisation and Cambridge International Examinations into the school sector, has not attracted as much opposition as the imminent de jure entry of foreign universities and education service providers into the tertiary sector.

Box 1

Quiet entry

Even as the debate on whether offshore education service providers, especially foreign universities should be freely allowed to establish subsidiaries and campuses in India gathers momentum, and the high-powered CNR Rao committee begins its deliberations, the ground zero reality is that over 130 foreign higher education service providers have already planted their flags on Indian soil via collaboration agreements with domestic institutions. They have entered into one or more of seven types of collaboration agreements with indigenous education services providers — twinning, franchisee, study and examination centres, multiple collaborations, link programmes, programmetric collaboration and offshore campuses.

The number of collaboration agreements signed by domestic education institutions with foreign education providers in several states of the Indian Union are given below:

Andhra Pradesh: 18

Delhi: 19

Goa: 2

Gujarat: 4

Haryana: 6

Karnataka: 13

Kerala: 3

Madhya Pradesh: 3

Maharashtra: 20

Rajasthan: 1

Tamil Nadu: 23

Uttar Pradesh: 4

West Bengal: 15

Total 131

Source: Directory of Foreign Education Providers in India, NIEPA, August 2004


However gradually, following the surprisingly painless and patently gainful outcome of industrial delicensing and liberalisation, informed opinion within academia is beginning to discern the advantages of liberalising higher education and encouraging cross-border flows of syllabuses, pedagogies and academics. Dr. R. Natarajan former director of IIT-Madras and until January chairman of AICTE (All India Council for Technical Education) which licences, assesses and accredits all engineering colleges and B-schools across the country, is in favour of "rational rather than strict" entry norms for foreign education service providers under GATS.

Natarajan: “rational rather than strict”
"Under my watch in AICTE we began the process of drawing up a policy to govern the entry of foreign providers of higher professional education in India with the objective of protecting the interest of all stakeholders, i.e students and existing institutions. I believe it’s important that only respectable offshore institutions certified by their embassies here should be allowed to operate in India. Secondly that the degrees, diplomas etc they award here should be of the same weightage as those awarded in their home country. Subject to these provisions, the entry of foreign universities and institutions should be welcomed as they will offer competition to Indian institutions and compel them to update their syllabuses and raise teaching-learning standards," says Natarajan.

Natarajan’s preference for "rational" regulations governing entry of foreign education providers, is shared by liberals within Indian academia. Judging by the pedigree of foreign varsities already here and offering distinctly less-than-blue chip twinning programmes, degrees and diplomas, they entertain justifiable fears that too liberal entry norms will result in a flood of low-end education providers of dubious antecedents entering the Indian marketplace, providing substandard education at high prices. Already several instances have come to light of high and noble sounding ‘universities’ offering fanciful qualifications at dollar and sterling prices, being mere mailing addresses and/ or hole-in-the-wall teaching shops in their home countries. Certainly none of the heavyweight, globally renowned universities — Harvard, Yale, Oxford, Cambridge etc — have exhibited any anxiety or urgency about entering the reportedly booming Indian marketplace for superior higher education. Mindful of their carefully nurtured reputations for academic excellence, their managements are wary about venturing abroad which would entail involving slipshod third world academics with teaching and/ or administration.

"Setting up a Harvard campus in India involves more than putting up buildings. For prestigious institutions with reputations to lose, it requires providing back-home style infrastructure facilities and recruiting or deploying highly-qualified faculty which can teach advanced syllabuses. All this is likely to result in tuition fees which are exorbitant by Indian standards. And unless the degrees and qualifications conferred are on a par with those awarded in their home countries, there aren’t going to be many takers for their services in India," says Dr. Sunder Ramaswamy director of the Madras School of Economics and visiting professor at Middlebury College, Vermont, USA.

This prediction is substantiated by the experience of one of the biggest names in British academia — the London School of Economics — which contracted in 2003 with the Mumbai-based SIES (South India Education Society) to deliver its highly reputed B.Sc (economics) degree programme in India. The dark horse choice of its conservative, low-profile collaborator which doesn’t speak well of LSE’s market intelligence capabilities apart, the venture was doomed from the start. "The LSE tie-up was something we attempted about a year ago but it fell through very soon. The tuition fee we had to charge students was exorbitant with just the registration fee being over Rs.100,000. Moreover they agreed to offer only their B.Sc degree — not MBA or any other qualification. We couldn’t gather a large enough batch of students willing to pay so much for a mere B.Sc degree," recalls K. Vishwanathan, a trustee and spokesman of SIES.

Indian School of Business, Hyderabad: long waiting list
Long accustomed to paying absurdly low tuition fees in government aided institutions of higher education (tuition fees in some of the country’s top-ranked colleges including St. Stephen’s, Delhi, St. Xavier’s, Mumbai, and Presidency, Kolkata are less than Rs.50 per month), Indian students are an unlikely market for foreign universities offering broad-based arts, science and commerce programmes priced in dollars, and the very green British pound in particular. The demand in the subcontinent is for postgraduate professional study programmes in engineering, sciences and especially business management. This explains why the Hyderabad-based International School of Business (ISB) funded by the topmost names in Indian industry which delivers a one-year postgraduate study programme in collaboration with the blue-chip Kellogg School of Management, USA and the London School of Business boasts a waiting list despite its thought-provoking tuition-cum-residence fee of Rs.13 lakh.

Against this backdrop of over-subsidisation of higher education (at the expense of primary and elementary schooling) and student resistance to paying anywhere near the actual cost of quality tuition, the most preferred option of foreign education service providers is twinning arrangements with local — usually private sector — colleges and universities. Typically under this arrangement, Indian students complete half or more of their study programmes at a cheaper price here and the remainder in the pricey campus of the foreign education service provider to acquire first world academic experience. In effect it halves the price of studying abroad where residential and living costs are multiples higher and enables students to access superior syllabuses, tuition and much-prized foreign qualifications.

Box 2

"Nobody can stop foreign universities.."

Vinay Rai, a former industry tycoon turned
educationist is the president of Rai University, a private institution established under the Private Universities Act 1996, of the state of Chattisgarh. Rai University, which has reportedly been spared derecognition by the Supreme Court judgement which recently (February 11) struck down the establishment of 97 universities licensed by the erstwhile Chattisgarh state government, has established 21 campuses across the country and offers undergraduate and postgraduate programmes in more than 340 courses and 15 disciplines. It boasts an aggregate enrollment of 12,000 students across India.

Under WTO accords is entry of foreign universities into India imminent?

Yes it is imminent. Nobody can stop universities from developed countries from entering and establishing campuses here as India is a signatory to WTO. And once GATS comes into force later this year, the Union government will have no choice but to let foreign education institutions/ universities establish campuses/ study centres in India. However the Union government has the right to regulate their entry and supervise their operations.

Is entry of foreign universities good for Indian education?

It’s very good. The entry of foreign universities will herald an era of healthy competition among local universities, which will result in raising standards across the board. Otherwise most government universities in the country which are still following ancient syllabuses and curriculums will continue to churn out unemployable and incompetent graduates. Only when they are faced with a threat of closure due to lack of student enrollment will they get their act together and make an effort to upgrade their academic standards.

How is it possible to ensure quality education by foreign universities?

I agree that all universities abroad are not of high standard. But to ensure that study programmes offered are contemporary, the government should establish autonomous quality control bodies such as NAAC. The function of NAAC or a similar body should be to rate all colleges and universities in the country and publish the ratings to make the public aware of their quality and standards.

In this connection it is significant to note that twinning programmes have enabled the de facto entry of foreign education providers quite independently of the WTO accords or GATS. Therefore the de jure status of foreign universities operating in India under bilateral contractual or twinning arrangements is a grey area. Certainly their syllabuses and curriculums are not approved by UGC, AICTE or NAAC. This may disqualify awardees of foreign degrees from getting government jobs, but that’s not a major consideration given that they are unlikely to apply for them. But in fast-expanding private sector corporates, foreign degrees awarded under twinning programmes are ranked above those of all but the very best domestic institutions.

Examples of successful twinning programmes are the Ohio Manipal School of Business, Bangalore; Tasmac-University of Wales and Dina-Middlesex and EI-AHLA in Pune, and the Mumbai-based Welingkar Institute of Management-Temple University. A reverse twinning programme is run by the Manipal Academy of Higher Education under which students of the Melakka Manipal Medical College, Malaysia complete their medical study programmes on the MAHE campus in Manipal.

Salunkhe: twinning practitioner
Perhaps the most avid practitioner of business management twinning programmes is the Mumbai-based Welingkar Institute of Management Development and Research which offers a unique tri-nation postgrad IMBA programme in collaboration with Temple University, USA and another two year Indo-Japanese B-school programme in collaboration with the University of Hamamatsu, Japan. "We have taken business education beyond national borders by establishing joint programmes with reputable foreign universities. These twinning programmes offer faculty exchange, tested syllabuses and global internships. With English being the prime language of higher education which can be offered at the most cost-effective prices worldwide, it’s only a matter of time before Indian institutions begin to attract foreign students. Already our international MBA programmes have attracted students from the US and Germany," says Dr. Uday Salunkhe director of the Welingkar Institute.

It is this prospect of India transforming into a hub of higher education following the regulated entry of foreign (i.e western) education institutions and a tacit but unarticulated awareness that over the past half century over-regulation and excessive government interference have run the country’s once highly rated colleges and universities into the ground, which prompts better informed academics to cautiously welcome the imminent entry of offshore education services providers under GATS. The cognoscenti are well aware that several Indian education providers such as the Manipal Education and Medical Group (MEMG) have already established campuses abroad (Malaysia, Nepal, Dubai), as has the Mumbai-based S.P. Jain Institute of Management Research (Dubai).

Christo: moral obligation
"As India — as also the US, Britain and several other major education provider countries — has not signed the GATs protocols on education, it is not yet obliged to permit foreign education institutions operational freedom in this country. However India is not in a position to oppose the entry of reputable foreign universities as several Indian universities including IGNOU (Indira Gandhi National Open University), BITS (Birla Institute of Technology & Sciences) and MAHE (Manipal Academy of Higher Education) among others have established campuses and/ or distance education centres in other countries. Therefore India is morally obliged to permit foreign universities to operate in India," says Dr. Glenn Christo hitherto planning director of the Manipal Education and Medical Group and currently an associate of Quintesse Consultants, Bangalore.

Moreover the two major pan-India school examination boards — CISCE and CBSE — have exported their syllabuses and school-leaving examination services to several countries in the Middle and Far East even as the globally respected Indian Institutes of Management and Indian Institutes of Technology are drawing up ambitious plans to export their academic services. Simultaneously there is growing realisation that India’s hitherto low-profile alternate medicine — ayurveda, yoga and homeopathy — institutes could well become huge foreign currency revenue earners for the nation’s high-potential services sector. Hence in the light of the awareness that to gain a little, we have to give a little, the imminent entry of foreign higher education institutions isn’t setting off alarm signals they would have in the pre-liberalisation era.

Debroy: healthy competition
Dr. Bibek Debroy, the well-known Delhi-based economist and acknowledged expert on foreign trade, is of the opinion that although India is not obliged under GATS to permit the entry of foreign education providers, it would be advisable to negotiate terms and conditions. "The entry of foreign universities will be good for Indian education for two compelling reasons. One, they will provide healthy competition to local institutions. And secondly since some shady foreign institutes are already here in any case, we might as well make access for the more respectable and credible institutions easier so that the wheat can be separated from chaff. Moreover it’s much better for foreign universities to come to India than for a growing number of Indian students to head overseas inflicting foreign exchange and brain drain losses upon the Indian economy," says Debroy.

Though the consensus of informed opinion seems to be that the entry of foreign education service providers into the Indian marketplace is subject to negotiations (which will have multilateral effect) in which India can afford to play hardball, according to Bangalore-based management and education consultant Dr. Raju Chandra Sekar, there is insufficient awareness within this country of OECD nations retaliating against India’s exports of software, BPO and hospitality (catering, crews etc) services if onerous entry conditions are imposed upon foreign education service providers. Chandra Sekar knows what he’s talking about having served as a Geneva-based advisor (1987-92) to the WTO and having helped to draft its protocols.

"At best the GATS gives member signatory developing nations some latitude in delaying the entry of foreign education institutions into their countries. But delaying negotiations requires them to formally admit that their education systems are weak and need protection, an admission the Union government is unlikely to make. However no WTO member nation can refuse to negotiate trade in any one or more of the 12 service sectors specified under GATS without risking expulsion or inviting retaliation. My advice to the Union HRD ministry would be to apply the liberal export-import regimen of the infotech industry to the higher education sector in the interest of students and India’s fast-growth service sector," says Chandra Sekar.

Prasad (left): “prepare to sign”
Dr. V.S. Prasad former vice-chancellor of the Dr. Ambedkar Open University (2001-03) and currently director of the National Assessment and Accreditation Council of India — the high profile UGC subsidiary which grades colleges and universities across the country on a scale of E to A++ — believes that the national interest demands that India "prepares to sign" GATS. "GATS allows developing countries to draw up a regulatory framework under which foreign education service providers can operate. Care should be taken to ensure that foreign universities and institutes should be accredited in their own country, that they are transparent and that the degrees and diplomas they award are on a par with those awarded in their home countries," says Prasad.

Growing awareness that even if a WTO member is not obliged to negotiate in sectors of its choosing under GATS, the penal provisions of the two protocols pack considerable punch, prompts establishment spokespersons to soft pedal the issue of the entry of foreign education providers into the Indian marketplace. "Per se there is no obligation or commitment under the accords to negotiate the entry of foreign education institutions into India. But as everybody knows non-compliance will result in pressure from various quarters. Broadly speaking, GATS allows the free movement of people to establish education centres in other countries and consequently the free entry of service providers in and out of India. But apart from the technicality of GATS, India needs to formulate a policy on this matter. Therefore the Union HRD ministry has recently set up a review committee headed by Dr. CNR Rao, former chief of the Indian Institute of Science, to examine this issue. The report of the committee should be ready in a couple of months which should hopefully help us navigate this issue better," says B.S. Baswan, secretary in the Union ministry of human resource development.

Box 3

"Stringent terms and conditions necessary"

Ajit Oberoi (left)
Ajit Kumar Oberoi an alumnus of Jiwaji University, Gwalior and the Oberoi School of Hotel Management is the executive director of the Pune-based Dina Institute of Hotel and Business Management (estb. 1996). Dina Institute which has collaboration and twinning arrangements with the EI-AHLA (Educational Institute of the American Hotel & Lodging Association, USA) and Middlesex University, UK, has an aggregate enrollment of 250 hospitality and business management students.

Are you in favour of the entry of foreign universities into India?

I don’t regard the entry of foreign universities into India a threat at all, so long as it is regulated with stringent terms and conditions which allow only reputed universities to operate here. If reputed institutions from abroad offer their education programmes in India, it would provide opportunities to Indian students to acquire internationally recognised degrees on home turf at lower cost. It would also enable students to get top jobs in MNCs setting up operations in India.

What type of conditions would you impose upon them?

Foreign universities and education service providers should be encouraged to have joint venture partnerships with Indian universities and recognised institutions. Together they should introduce new research oriented programmes in engineering, medicine, pharmacy, technology etc. Joint ventures which marry the teaching skills of foreign institutes with the marketing and managerial expertise of local partners, work well. At Dina Institute we have tied up with EI-AHLA and Middlesex University, UK. Together we provide globally accepted study programmes which attract students from all over India. These partnerships have been very successful.

Quite clearly it’s crunch time for India’s 15,600 colleges and 311 universities as also for the country’s specially legislated showpiece instit-utions such as the IITs and IIMs in which an estimated 9 million of the nation’s future leaders are studying. It is highly unlikely that the incumbent or any other responsible government in New Delhi will risk jeopardising India’s high-potential international trade in services to protect vested interests in higher education. There is a broad, even if inadmissible consensus, that barring a handful of specially legislated institutions of higher learning, tertiary education in contemporary India is mediocre, if not obsolete. Therefore it requires the booster adrenaline of foreign competition which will force the managements of domestic colleges and universities to get their act together and raise teaching-learning standards to globally acceptable levels.

As it sets about its deliberations, the high-powered CNR Rao committee would do well to bear this vital factor in its collective mind. While prescribing terms and conditions for the entry of foreign education service providers into India, it needs if at all, to err on the side of liberalism. The broader national interest demands it.

With Hemalatha Raghupathi (Chennai); Neeta Lal (Delhi); Gaver Chatterjee (Mumbai); Michael Gonsalves (Pune) & Srinidhi Raghavendra (Bangalore)

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