How to make India a global study destination

The recent Open Doors Report 2024 revealed a telling trend: India has become the largest source of international students in the U.S.; with a record-breaking 3,31,602 students enrolled in 2023-24. Indian students pursuing higher education abroad are making substantial financial contributions to international economies. In 2022, their direct spending — encompassing tuition fees, housing, and living expenses — was estimated at approximately $47 billion. This figure is projected to escalate to as much as $70 billion by 2025.

While this reflects the ambition and global outlook of India’s youth, it raises an important question: Why are so many of India’s brightest minds compelled to seek education abroad? India aspires to emerge as a global leader in education and innovation. Yet, the student exodus underscores significant challenges in our higher education ecosystem. The answer lies in transforming India into a global study destination; not just for our own students but also for international learners. This transformation, however, requires a cohesive, multi-pronged strategy addressing education quality, financial sustainability, institutional autonomy, and capacity building.

Diversified financial model

The core challenge lies in India’s disproportionate reliance on tuition fees in privately funded institutions and government grants in public-funded ones as the primary sources of revenue. In globally renowned universities, tuition fees contribute only 15-20% of the total revenue. In a stark contrast, Indian institutions often rely on tuition for over 80% of their funding. Similarly, government-funded institutions draw nearly 90% of their revenue from public funds. Both models are unsustainable and lack the scalability required to meet the growing demands of the education sector.

Ideally, tuition fees should contribute only 30-40% of total revenues. A sliding fee structure, coupled with merit-based scholarships funded by endowments, can help ensure access to quality education without compromising affordability. Endowments, a mainstay of global universities, should form 30-35% of the revenue base. Encouraging philanthropy from alumni and corporate donors, supported by favourable tax policies and streamlined regulations, is essential to building these endowments.

Additionally, research overheads can contribute 20-25% of revenues through industry-academia collaborations and global research grants. By prioritising applied research that addresses real-world challenges, institutions can generate funding while making meaningful contributions to society. The remaining 10-15% of revenues can come from alternative sources such as executive education programmes, intellectual property commercialisation, and investments in start-ups.

This balanced approach reduces the financial burden on students while ensuring that institutions have the resources to invest in research, innovation, and global competitiveness.

Capacity and quality

Financial sustainability is only one piece of the puzzle. Scaling capacity and enhancing quality are equally critical. The government alone cannot meet the growing demand for higher education.

Public-private collaboration is central to this effort. Private institutions, supported by Public-Private Partnerships (PPPs) and Corporate Social Responsibility (CSR) initiatives, must play a greater role.

India needs to establish new world-class universities while upgrading existing ones with state-of-the-art infrastructure. A vibrant research and innovation ecosystem must be built by fostering industry-academia partnerships, increasing R and D funding, and creating mechanisms for monetising intellectual property. Flexible, interdisciplinary academic programmes aligned with global standards can further enhance the appeal of Indian institutions.

To improve the diversity and quality of education, Indian universities should actively recruit international faculty and forge global academic collaborations. Such measures would not only raise the global profile of Indian institutions but also expose students to a truly international learning environment.

Autonomy and accountability

An enabling policy environment is essential to drive these reforms. Institutional autonomy, as emphasised by the National Education Policy (NEP) 2020, is a cornerstone of this transformation. Universities need the freedom to innovate in curriculum design, resource allocation, and partnerships with global institutions. Autonomy empowers institutions to respond dynamically to changing global and domestic needs, aligning strategies with global benchmarks.

Government policies must also encourage the creation and growth of endowments. Substantial tax benefits and flexibility in fund management can incentivise philanthropy. However, with autonomy must come accountability. Independent audits and professional fund management practices should be mandated to build stakeholder trust and ensure transparency.

Globally, universities are moving toward zero-tuition models sustained by endowments and research revenues. India, too, must aim for a future where quality education is universally accessible, rather than an aspirational privilege.

With these measures, India can reverse the brain drain and position itself as a global hub for education. The goal is not merely to retain Indian students but to attract learners from around the world. The time to act is now. By taking bold, transformative steps today, we can ensure that India’s brightest minds not only stay but thrive, and that global talent aspires to call India their alma mater.

Views expressed are personal.

The writer is Vice Chancellor, BITS Pilani Group of Institutions, and former Director, IIT Delhi.