Two years back, when 29-year old Aayush Sharma first thought of applying to a good business school abroad for a globally recognized MBA, he fixed his gaze on a small set of top American institutions. Yes, the US offered the majority of the world’s best B-schools, but what excited the Delhi-based software executive most was a chance to work on Wall Street.
But by late 2012, when he actually applied, Sharma’s plans had changed. He applied mostly to B-schools in Europe and Singapore.
"It’s time to stop dreaming,” Sharma said, laughing about his changed plans. “In the current global economic scenario, I need to look at what gives me best return on investment, and the US isn’t necessarily that destination anymore.”
He isn’t alone. An increasing number of Indian students seeking a globally recognized MBA are looking at universities in Singapore, France, Spain and even India, looking beyond the US, the traditional favourite, the latest statistics of the Graduate Management Admission Council (GMAC) show. The GMAC, a US-based non-profit body, conducts the Graduate Management Aptitude Test (GMAT), the test used by most top B-schools across the world to shortlist their candidates.
While the US remains the most popular B-school destination, the percentage of GMAT test scores that Indian students send to US universities for applications has dropped from 64% -- almost two-thirds of all applications – to 51% -- just over half -- between 2008 and 2012, data reviewed by HT shows.
Singapore, which received 5% of Indian GMAT scores in 2008, received 8% in 2012. France’s share rose from 4% to 5%, and the UK’s from 7% to 8% over this period. And Indian B-schools, increasingly accepting GMAT scores for multiple programmes, received 18% of the country’s GMAT scores in 2012, as compared to 14% in 2008. Spain, Hong Kong, the UAE and Germany have all also seen their number of applications from India more than double between 2008 and 2012.
“What we’re seeing is an increasingly discerning Indian student no longer blindly going just for US business schools, and instead looking at what gives them their money’s worth best,” Ashish Bhardwaj, GMAC regional director for Asia said. “The US may still work for many students, but clearly not for everyone.”
The drop in B-school applications to the US comes even as though the total number of Indian students going abroad – across streams – has remained relatively steady, at about 100,000 a year. Unlike most science, social science and engineering programmes, B-schools rarely offer significant scholarships to students, raising the financial burden applicants need to brace for.
Like Sharma, Jyotin Chaddha was confident in 2010 that the global economic slowdown would end in a year or two. But with the US economy still struggling, Europe on the ropes and even India and China slowing down, Chaddha has had a rethink.
An MBA at a top US B-school typically carries a tuition fee cheque of about USD 60,000 ( Rs. 33 lakh) a year, significantly higher than most comparable European programmes. Top universities in Singapore, and the Indian School of Business in Hyderabad – widely rated India’s most globally recognized B-school – charge Rs. 25 lakh for tuition and living costs together. The Indian Institutes of Management, which now use the GMAT for their executive education programmes, charge even less, for a two-year programme.
“If I’m going to be coming back to Indian salaries after my MBA, I need my investment to be lower too,” Chaddha said.
A sharp increase in the number of good Indian B-schools recognizing GMAT for admissions has helped many students who changed their mind about going abroad to instead apply at home.
But demographics are affecting the flow of Indian B-school aspirants abroad too, during the global economic slump.
Most Indian students traditionally keen on applying abroad are in their late 20s, often married or on the cusp of getting married, with greater responsibilities than fellow applicants from just across the border, in China. Unlike Indians, most Chinese students who appear for the GMAT are fresh from completing their undergraduate programmes, Bhardwaj said.
So while the number of Indian students willing to pay the high fees involved in going to the US is dipping, the number of Chinese has remained steady, 77% of that country’s GMAT scores in 2008, and 78% in 2012.
(An earlier version of this story incorrectly identified the GMAC as the Graduate Management Aptitude Council.)