India is known worldwide as an important contributor in the global education industry. India has one of the largest networks of higher education institutions with 903 universities and 39050 colleges (AISHE 2017-18). Educational Services include: Primary Education Services Secondary Education Services, Higher Education Services, Adult Education and Other Education Services. Indian Education system comprises of both public and private sector. India’s education sector have high growth opportunity as approximately 29% of India’s population is between the age group of 0-14 years. During the FY2017-18, Education sector in India is estimated at US$ 91.7 billion and is expected to reach US$ 101.1 billion by the end of FY19E and US$ 35.03 billion by 2025E. India is also the second largest market for e-learning after United States and e-learning sector is expected to reach US$ 1.96 billion by 2021 with around 9.5 million users. Online higher education may prove to be a good alternative and is expected to grow at 41% CAGR between the FY2016-2021. India’s Education sector is expected to witness high growth in the coming years as India is expected to have world’s largest tertiary-age population and second largest graduate talent globally by the end of 2020.
As per All India Survey of Higher Education (AISHE) 2017-18, total enrollment in higher education has been estimated to be 36.6 million with 19.2 million boys and 17.4 million girls during the FY2018. Girls constitute 47.6% of the total enrollment. Gross Enrollment Ratio (GER) in Higher education in India for 18-23 years of age group is recorded at 25.8% in 2017-18. Government of India has the target of Gross Enrollment Ratio (GER) of 30% for higher education by 2020 to drive investments in Indian Education sector.
Source: Survey of Higher Education (AISHE) 2017-18
India’s Higher education system has undergone rapid expansion in the past decade. Currently, India’s higher education system is the largest in the world enrolling over 70 million students. India has managed to create additional capacity for over 40 million students and the segment is expected to reach US$ 35.03 billion by the end of 2025.
Source: Survey of Higher Education (AISHE) 2017-18
As per the AISHE 2017-18, a total of 36.64 million people were enrolled in higher education institutes during 2017-18 (19.2 million Males and 17.4 million Females). Gross Enrollment Ratio in higher education reached 25.8 per cent in 2017-18 as compared 20.75% in 2011-12.
Number of foreign national students enrolled in India is 46,144 in 2017-18. The foreign students come from 166 different countries with highest share of students from the neighbouring countries such as Nepal is 25.0% followed by Afghanistan 9.5%, Sudan 4.8%, Bhutan 4.3%, Nigeria 4.0%, Bangladesh and Iran 3.4%, Yemen 3.2%, U.S. 3.1% and Sri Lanka 2.7%.
With Government and the private sector stepping up investment in the Indian education sector, the number of schools and colleges have seen an uptrend over the past few years. Total number of collages has increased from 34852 in FY2012 to 39050 in FY2018. Also, the number of universities has increased to 903 in 2018. To further boost education services, Government of India has taken many important initiatives like Skill India Mission , National Skill Mission, National Education Policy (in the process of making), Outlay for the education sector is set at Rs 85,010 crore (US$ 13.13 billion) under Union Budget 2018-19, 100 % FDI (automatic route) is allowed in the Indian education sector etc. Total amount of Foreign Direct Investments (FDI) inflow into the education sector in India stood at US$ 1.7 billion from April 2000 to March 2018 (Department of Industrial Policy and Promotion)
Some notable Trends includes-
- To provide international standard quality education, many Indian private players are collaborating with international brands. This has given emergence to International school segment as well as international collaborations with foreign universities and colleges.
- To provide better education to students, schools and colleges are investing in information and multimedia education. Recently started, Byju’s, the mobile learning start up, is expecting a billion dollar evaluation, on the back of increasing use of the apps by students. More than 400,000 students are using the app currently, ranging from K-12 students to students preparing for competitive exams.
- Specialised degrees are gaining more momentum in colleges and Universities. As more and more students are opting for industry focused qualifications, the demand for specialised sector specific degrees are picking up.
- With increasing internet penetration, trend of online learning and investments in online learning is increasing. Through corporate partnerships, vocational training companies are training college pass outs with both soft and hard skills required by their corporate partners. In April 2018, National Programme on Technology Enhanced Learning (NPTEL) and Intern Shala signed a Memorandum of Understanding (MoU) to provide internships in over 1,800 colleges in India.
- Indian Education sector is witnessing Increasing interest from PE/ VC firms for investments. During 2017, 18 merger and acquisition deals worth US$ 49 million has been finalized in Education sector.
India enjoys strong position worldwide in Education services and it is one of the fastest growing and highly demanding services sector. There are several factors contributed to the exponential growth of this sector in India are-
Increasing disposable incomes and willingness of people to spend on education is a key driver for the Indian education industry. Increasing awareness about education increasing the student’s enrollments in both private and public sector high education institutions. With growing student enrollments in Higher Education sector of India, there exists huge demand of additional schools, colleges, universities and vocational training centres to meet the requirements of students.
India's Competitive advantage
India have the world’s largest population of about 500 million in the age bracket of 5 to 24 years which provides a great opportunity for the education sector (Ministry of Statistics and Programme Implementation, Youth in India Report 2017) Increasing internet penetration to help education delivery. As of December 2017, internet penetration in urban and rural areas was 64.84% and 20.26%, respectively (Telecom Regulatory Authority of India (Performance Indicator report, 2018)
Education sector has attracted huge foreign direct investments over the past two decades. During April 2000 to March 2018, FDI inflows of US$ 1,701.95 million has been witnessed in education sector. As per the estimates, investment of US$ 200 billion needed by Government to achieve the target of 30% GER for the higher education segment by 2020 (IBEF Sector Report, September 2018)
Strong Policy Support
Many government initiative has been taken by the government to promote Indian education sector such as 100% FDI (automatic route, National Accreditation Regulatory Authority Bill for Higher Educational, Foreign Educational Institutions Bill, National Education Policy, high budget to education sector under union budget 2018-19, etc.
Growth of Indian Education Sector
Indian Education sector has witnessed strong growth in the last decade. There has been a significant increase in the number of colleges and universities operating in the country. The share of private sector has increased substantially in education sector of India especially in higher educational institutions like Universities. The share of private universities in total universities in India has increased from 3.43% in 2008-09 to 34.82% as of April 2018. As per All India Survey of Higher Education 2018, among 903 total Universities in India, 343 Universities are privately managed.
Source: Survey of Higher Education (AISHE) 2017-18
|Major University Type
||Number of University
|State Public University
|State Private University
|Institute of National Importance
Number of Universities in the last 5 years
India has the world’s largest higher education system and ranks 2nd in terms of student enrollment in higher education. Student’s enrollment in higher education in India has grown sharply in the last decade. It has increased from 32.34% in 2013-14 to 36.64% in 2017-18. Online higher education is gaining much popularity worldwide these days due to high use of internet and mobile applications for education. Online higher Education market is expected to grow at 41% CAGR in between 2016-2021 which indicates strong growth for Indian education sector.
Foreign Investments in Indian Education sector has risen sharply in the last two decades. As per the data released by Department of Industrial Policy and Promotion (DIPP), the sector has received cumulative FDI worth US$ 1.70 billion from 2000 onwards up to March 2018 (DIPP, Minstry of Commerce and Industry). Ministry of Human Resource Development, Government of India is also planning to raise around US$ 15.52 billion from private companies and high net worth individuals to finance improvement of education infrastructure Universities Mix (2009) Universities Mix (2018) Mi Indian Student Enrollments (Millions) in the country (June 2018) which will be mobilised by the Higher Education Funding Agency (HEFA). Also, capital base of Rs 10,000 crore (US$ 1.49 billion) was approved for the Higher Education Funding Agency (HEFA) in July 2018 to boost Indian Education sector. Apart from these investments, Indian education sector witnessed 18 merger and acquisition deals worth US$ 49 million in 2017 and 20 private equity deals in the first half of 2018.
There are several strategies adopted by Indian government and private sector to promote the growth of Indian Education sector. Some of them includes providing online and supplemental solutions like Educomp offering various online and supplemental solutions to help institutions to leverage the most of Technology, Dish TV has added 32 educational channels of HRD Ministry to its Platform, scholarship offerings, Indian service providers proposing Joint ventures with foreign players like Andhra Pradesh signed 4 memorandums of understanding (MoUs) with various organizations engaged in educational activities, to promote innovation, internationalization and establishment of research capacities. Also, many Indian institutions are open to establish strategic alliances with Australian institutions, as Australia is a preferred destination for Indian student.
Policy support and initiatives
Government of India has taken many initiatives to boost Indian Education sectors. It includes-
- Outlay for the education sector in the Union Budget 2018-19 is set at Rs 85,010 crore (US$ 13.13 billion)
- In the backdrop of promoting internationalization of higher education, MHRD has introduced a new scheme “Study in India”. (https://www.studyinindia.gov.in/). It was launched on 18.04.2018. The program aims to increase the inflow of inbound international students by 3 times through a systematic brand-building, marketing, social media and digital marketing campaign. The program involves partnership with around 100 select reputed Indian institutes/universities (based on NIRF and NAAC rankings) and focuses on 30 target countries across South-East Asia, Middle East and Africa. Study in India program provides for a centralized admission portal with details of institutions, seats being offered, fee waivers being offered. This initiative also would ensure debottlenecking of regulatory issues involved in the internationalization of higher education
- Global Initiative of Academic Networks (GIAN) is a program aiming to attract reputed foreign faculty for short term teaching assignments in Indian Institutions. So far, more than 700 such foreign faculty have visited Indian Institutions under this program.
- After an overwhelming response to Global Initiative of Academic Networks (GIAN), gian.iitkgp.ac.in/), MHRD has launched another flagship initiative Scheme for Promotion of Academic and Research Collaboration SPARC (www.sparc.iitkgp.ac.in). The Scheme aims at improving the research ecosystem of India’s Higher Education Institutions by facilitating academic and research collaborations between reputed Indian Institutions and the best institutions in the world from 28 selected nations to jointly solve problems of national and / or international relevance through Joint Research Projects involving the mobility of faculty and students
- MHRD emphasizes on technology enabled learning in school and higher education area. Under National Mission on Education through ICT (NMEICT), many initiatives like SWAYAM, India’s own MOOCs platform and others like National Digital Library are operational to provide digital education to students and other learners.
- Samagra Siksha scheme was launched by Ministry of Human Resource Development, Government of India in May 2018, to integrate Sarva Shiksha Abhiyan (SSA), Rashtriya Madhayamik Shiksha Abhiyan (RMSA) and Teacher Education (TE) schemes and aim to achieve holistic development of school education in the country.
- Prime Minister has launched the Skill India initiative – ‘Kaushal Bharat, Kushal Bharat’. Under this initiative, the government has set the target of training 400 million citizens by 2022. It includes various programs like: Pradhan Mantri Kaushal Vikas Yojana (PMKVY), National Policy for Skill Development and Entrepreneurship 2015, Skill Loan scheme, and the National Skill Development Mission
- In order to boost the Skill India Mission and other two new schemes- Skills Acquisition and Knowledge Awareness for Livelihood Promotion (SANKALP) and Skill Strengthening for Industrial Value Enhancement (STRIVE), Cabinet Committee on Economic Affairs (CCEA), Government of India approved an outlay of Rs 6,655 crore (US$ 1.02 billion) which will be supported by World Bank
- The new National Education Policy (NEP) which is considered as an utmost important parameter of Education in the country is in its final drafting stage and is expected to be finalized by the end of this year
- Technical Education Quality Improvement Programme started in April 2017 with funding from World Bank to improve quality of technical education in 19 states of India. It will continue to run for more three years
- Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA), scheme initiated in February 2017, with the aim of providing digital literacy to 60 million rural households in the country by March 2019. It has successfully covered more than 10 million candidates as of January 2018
Apart from the above Policy initiatives, various other initiatives to boost education sector includes-
- Emphasis on the growth of distance education market, besides focusing on new education techniques, such as E-learning and M-learning
- Opening of IIT’s and IIM’s in new locations as well as allocating educational grants for research scholars in most government institutions.
- ‘Mentor India’ campaign launched by Niti Aayog in August 2017 to motivate new and innovative ideas for change
- The Ek Bharat Shreshtha Bharat (EBSB) campaign to increase engagement between states, union territories, central ministries, educational institutions and general public is undertaken by Ministry of Human Resource Development.
Opportunities and Road Ahead
The aim of the government is to transform India into a knowledge haven by the end of 2030. So many government initiatives and changes in financial outlays has resulted in high growth and investment opportunities in Indian education sector. It is estimated that by 2030, India will emerge as single largest provider of global talent, with one in four graduates in the world being a product of the Indian higher education system, Gross Enrollment Ratio (GER) will rise to 50%, India will be in top 5 countries in the world in terms of research output with an annual R&D spent of US$ 140 billion and have more than 20 universities among the global top 200.
These targets set by the government giving strong indicators for investment opportunities such as-
- Public Private Partnership (PPP) Government is encouraging setting up of formal educational institutes under the PPP mode. In the case of PPP the Government is considering different models like the basic infrastructure model, outsourcing model, equity/hybrid model and reverse outsourcing model. Government of India has also announced a scheme to set up 2,500 model schools under PPP (2016).
- High Opportunities for foreign investments More opportunities are available for private and foreign sector to make twinning arrangements with Indian institutions. rendering infrastructure services including Development, IT and development of course content. Future opportunity is also available for setting up campuses of foreign universities in India.
- Innovative services in Education sector As the tutoring and online learning segment is expected to grow from US$ 8 billion in 2011 to US$ 26 billion in 2020, a growing opportunity exists for coaching and tutoring services through innovative means, mainly through the internet.