indianotes

Policy reforms opened the door to foreign universities in India. Trump may have provided the push that finally gets them through it.

According to official estimates, around 1.33 million Indians were studying abroad in 2024. That’s a pretty large number, but not at all surprising.

The bulk of these were in Anglophone countries – Canada, the US, the UK and Australia together accounted for over a million students.

While precise figures are elusive, various estimates suggest that these students (or their parents) collectively spend $45-60 billion annually. That works out to around $35-46k (roughly ₹30-40 lakhs) per student per year. And this is conservative.

The spend isn’t just on tuition fees, but also on books, laptops, rent, food, travel, insurance, entertainment, and more. Add in trips by parents visiting their children, vacations, and ancillary expenses – most of these students are from well-off families with a propensity to spend.

Anyway, let’s start with a round number of $50 billion. Mull over that for a while.

If you don’t like dollars or billions, how about ₹425,000 crores?

Not large enough for you?

How about if I tell you that’s approximately nine times the Central Government’s 24-25 budget estimate for higher education at ₹47,620 crores?

This is a humongous outflow of foreign exchange, and while there are several reasons, the most important one is the shortage of high-quality university capacity in India.

For decades, our socialist instincts have restricted private participation in higher education. Education is a “state” subject, and even when “licenses” have been given, most have gone to the politically connected. The few quality private sector colleges have had a long struggle. While attitudes are changing, and a few private players have created high-impact institutions (Ashoka, Flame, ISB, Jindal, Symbiosis, Manipal, etc.), the demand-supply gap remains substantial.

The current government has been trying to encourage foreign universities to set up in India. However, opposition and bureaucratic delays meant that the National Education Policy (NEP) was only passed in 2020, and UGC rules were notified in 2023.

So far, State governments have been slow to get off the mark – barring Gujarat, which aggressively promoted GIFT city as an educational hub.

Enter Trump.

Visa and work permit restrictions in the UK and Canada were already cooling demand. But Donald Trump’s stricter (and louder!) stance on US visas, rising deportations, and “viral” reports of student harassment have thrown the issue into the spotlight.

Suddenly, the economics of studying abroad don’t look as appealing. Students and parents are seeking alternatives, and foreign universities, their Indian partners, and even state governments are scrambling to respond.

The opportunity is substantial. Maybe not all the foreign spend will be redirected, but a few billion won’t hurt.

Indian cities that are educational hubs already benefit greatly. For instance, Pune hosts more than 250,000 students, with a significant majority of these from outside the city. Reports suggest that this adds around ₹14,000 crores to the local economy. My back-of-the-envelope calculations put it a bit higher.

Another example is Manipal. This small suburb of a small town (Udupi) has upwards of 25,000 students. Direct and indirect employment probably exceed that number. Today, Manipal is a bustling township, literally risen out of nothing.

Apart from pure spending, universities generate many high-quality jobs – teachers, lab assistants, admin staff, and more. And indirectly support many more employed in providing food, stay, entertainment, etc. On top of all this, more universities mean more R&D, and in today’s world – more innovation and start-ups. The resulting competition (for teachers and students) will also force existing colleges to up their game.

What’s not to like about all this?

Gujarat has been the quickest off the block. Two Australian universities (Deakin, Wollongong) are already operational at GIFT city, with another two to three in the pipeline. A few days ago, U of Southampton announced classes beginning August 2025 in Gurugram. Maharashtra has planned an “education city” near Navi Mumbai.

Apparently, another eight universities have received permission to start next year, and the Education Minister, Mr. Pradhan, has suggested that fifteen will kick off by 2027.

So far, the bulk of the action has been from Australian or British universities – but the Americans are finally waking up. Some random conversations I’ve had with friends in the education business suggest that the number of universities showing interest could be much higher – well over a hundred!

Thank you, Mr. Trump!