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Sector Overview

India is known worldwide as an important contributor in the global education industry. Indian Higher Education is 3rd largest in the world after US and China with over 35 million students enrolled and 850 universities. As per the QS Higher Education System Strength Rankings 2018, Indian Higher Education ranks 26th in the world with Indian Institute of Technology (IIT)-Bombay, IIT-Delhi and Indian Institute of Science (IISc), Bengaluru in the top 200 global universities. Many top institutes in India are offering competitive courses/degrees in terms of quality and at one-fourth the cost as compared to US, UK and other developed countries, guaranteeing value-for-money education.

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 enrolment in higher education has been estimated to be 36.6 million with 19.2 million boys and 17.4 million girls during the FY2018. Government of India has the target of Gross Enrolment Ratio (GER) of 30% for higher education by 2020 to drive investments in Indian Education sector.

Education Graph
Education Graph
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.

Enrollment Graph
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).

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-

Education Graph
  • 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.
  • 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.
  • 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.

References - Data and reports available in the public domain including Ministries Annual Reports and Data Statistics, IBEF Sectoral Reports, Department of Industrial Policy and Promotion (DIPP), RBI Handbook of Statistics on Indian Economy, Media & Industry Reports, Press Information Bureau (PIB), Union Budget 2018-19

Disclaimer - This information has been collected through secondary research and is available in the public domain. We are not responsible for any errors in the same.

Advantages/Growth Drivers

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-

Education Graph
Growing Demand
Increasing disposable incomes and willingness of people to spend on education is a key driver for the Indian education industry.
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)
Rising Investment
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.

Education Graph
Education Graph
Source: Survey of Higher Education (AISHE) 2017-18
Major University Type Number of University
2013-14 2013-15 2013-16 2013-17 2013-18
State Public University 309 316 329 345 351
State Private University 153 181 197 233 262
Deemed University-Private 80 79 79 79 80
Institute of National Importance 68 75 75 100 101
Central University 42 43 43 44 45
Deemed University-Private 36 32 32 33 33
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.

Education Graph

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).

Education Graph

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.

Foreign Students in India

India is known worldwide for quality education especially of engineering/technology and business management. In fact, Indian origin doctors and scientist are almost considered a brand in many developed countries like US and UK. Top colleges for professional courses in India includes the most prestigious Indian Institutes of Technology and Indian Institute of Management offering variety of modern courses. Apart from the government institutions, India have a good number of private universities and colleges imparting quality education with international presence and recognition.

Many foreign students are choosing India as a preferred destination for pursuing higher education due to world-class reputation in Science and Technology, English as main language of instruction and affordable education with best quality. Other than Science and Technology, India is also offering many short term courses in niche areas like Yoga, Ayurveda, Sports, Hindi Language, Buddhism, Dance, etc.

A total of 46144 foreign students from more than 160 countries are currently enrolled in India. Majority of the foreign students are enrolled in Engineering and business programs followed by arts and medicine. Currently, 2874 foreign students is enrolled in B. Tech in Indian institutes, followed by 2582 in Management and commerce courses, 2000 in Arts courses. Taking together MBBS, Pharmacy and other Science courses, around 7000 are enrolled in India.

Engineering is one of the most preferred course to study by foreign students in India. Some of the best engineering colleges in India for foreign students includes the prestigious Indian Institute of Technology and National Institutes of Technology followed by many popular private universities like Birla Institute of Technology and Science, Vellore Institute of Technology, Symbiosis Institute of Technology, Manipal Institute of technology, etc.

Scholarships for Foreign Students in India

To make education cheap and affordable for foreign students, Indian Government is offering many scholarships for international students in India under General Cultural Scholarship Scheme (GCSS), Cultural Exchange Programmes, Common wealth Scholarship, etc. at under-graduate, post-graduate and Ph.D. degree level. Students from both developed and developing countries like U.S, Afghanistan, Bhutan, Nepal, Iran, Bangladesh, etc. are coming up to study in India.

International Universities in India

Apart from Indian universities, India have some very renowned international universities in India working either in collaboration with Indian institutions or operating independently. These universities are providing opportunities to foreign as well as Indian students to study at home or abroad, while still getting the valuable education they desire.

List of international universities in India having base in United States and other developed countries.

  • Schulich School of Business, Toronto, Ontario, Canada (SP Jain Institute of Management and Research in Mumbai)
  • Middlesex University, London, England (Ahmedabad, Chennai, Hyderabad and Mumbai)
  • Duke University, North Carolina (Bangalore)
  • Virginia Polytechnic Institute and State University (Virginia Tech), Blacksburg, Virginia (Chennai) and many more.

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”. ( 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),, MHRD has launched another flagship initiative Scheme for Promotion of Academic and Research Collaboration SPARC ( 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.
Skill India
Sarve Shiksha Abhiyan
Samagra Shiksha Scheme

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.

Education Graph

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.

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