Can’t go abroad for studies? Fret not, the university may soon come to India

NEW DELHI : The commerce and human resource development (HRD) ministries are in talks to allow foreign universities to open campuses within special economic zones

NEW DELHI : The commerce and human resource development (HRD) ministries are in talks to allow foreign universities to open campuses within special economic zones (SEZs), a move that will allow them to skirt onerous restrictions placed on such institutions under Indian rules.

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Repatriation of profits by educational institutions, barred under Indian law, will be among the main benefits they will gain by setting up campuses in SEZs, according to two government officials familiar with the matter, who declined to be named.

SEZs are territories where India’s domestic tariffs do not apply and companies located in these areas have to pay export and import taxes to trans act with the rest of the country.

Opening the door to foreign universities will not only help address the shortage of quality higher-education institutions in India but will also help draw students from other Asian nations and reduce the need for local students to spend large sums of money to study abroad.

Indian students spent $1.98 billion (almost ₹14,000 crores) in education-related overseas expenditure in the year ended March 31, 2016 and $2.47 billion (almost ₹16,700 crore) in the previous fiscal, according to the Reserve Bank of India.

Easy availability of land will be an added attraction. SEZs are currently sitting on vast tracts of unutilised land as they are unable to draw manufacturing or services units because of unattractive tax policies.

Services SEZs area new concept and many countries, such as the United Arab Emirates and South Korea, have tried it, said Arpita Mukherjee, a professor at the Indian Council for Research on International Economic Relations in Delhi.

“But those countries have focused on providing integrated services because their SEZs are very large. It is still doable in India but we have to build the right model for it,” she added.

“We have advised them (the HRD ministry) to put universities within SE Zs which are then technically not part of the Indian system but offer degrees which conform to some international standard cleared by the HRD ministry. Now it is up to them to drive the process ,” said a commerce ministry official, one of the two people cited earlier.

Indian students may still have to pay in foreign currency to study in such institutions. “The whole idea is if they are going to consume services in the UK, Canada and Australia, why not next door?” the official said.

The second official cited earlier said the debate around allowing foreign universities to open campuses in India is now being revived and that the discussion has been initiated by the commerce ministry.

“Repatriation of revenue to the parent campus is one of the contentious issues. Operating from SEZs will help in solving this repatriation of income issue and allow such institutions to operate with little interference from (domestic) regulators, though they will not be totally immune to it,” the official said.

The official, however, said it will be difficult to implement a proposal where Indian students need to pay in foreign currency without enough debate. “It has not happened in India yet and its feasibility needs careful scrutiny,” he added.

India has been considering allowing foreign universities to open their own campuses here and grant independent degrees since 2010.