Indian Education Market Analysis

Table of Contents

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1. Introduction…………………………………………………………………………2
2. Framework of International Business in an overseas market…………………3
3. An Analysis of why University of Wollongong expand to India………….…….3
4. PESTLE Analysis of the Indian Education Market………………………………4

• 3.1 Political Environment Analysis……………………………………….4
• 3.2 Economic Environment Analysis…………………………………….5
• 3.3 Social and Cultural Environment Analysis………………………….5
• 3.4 Technological and Legal Environment Analysis……………………6

5. Recommendations…………………………………………………………………
6. Conclusion………………………………………………………………………….
7. References………………………………………………………………………

Introduction

Framework of International Business in overseas market.

Higher education these days has become a profitable business due to high demand of quality education worldwide. This has given rise to international branch campuses all around the world. These campuses operate in host country and provide awards and qualifications with a brand name of home university.

An Analysis of why University of Wollongong expand to India

UOW has already established a very strong partnership with Indian academic institutes in the areas of mining technology, renewable energy and logistics. UOW also have strong links with major Indian IT companies like Infosys. The cost of setting up a campus in India will be less because UOW has very strong local ties which will be helpful in raising the capital. University is also popular among Indian students and over one thousand Indian students are currently enrolled in UOW’s Australian and Dubai campuses. Indian education sector is viewed as very lucrative as the country want to develop skills of around 400 million people by 2022(Munro, 2017). It is highly anticipated that UOW would make profit by extending its overseas market to India. There is no doubt that every business venture has some risks associated with it.  In this case, major risk would be that students may prefer to study in university’s Australian campus instead of Indian campus. This risk can be minimised by offering less tuition fees at Indian campus. Another solution is to offer twinning arrangements to students which would involve option of partial study in Indian campus followed by study in Australian campus.

PESTLE Analysis of Indian Education Market

Indian education sector has recently been identified as a lucrative market for investment due to low literacy rate, growing urban population and recent increase in per capita income. India’s education sector does offer many profitable business opportunities for foreign universities like UOW(Tohmatsu, October 2012). India’s higher education market has grown significantly in the past ten years as shown in the fig below.

More students are enrolling in higher educational institutes after leaving school and willing to pay more for quality education. There are opportunities for foreign universities to establish an international branch campus in India independently or in collaboration with private sector. A detailed analysis of Indian market in terms of political, environmental, social, technological and legal factors can be discussed as follows:

Political Environment

India is a democratic country and current government was elected in May 2014 under the leadership of Prime Minister Narendra Modi. Current government is very stable and strongly support foreign investment in education sector. A legislation is currently underway to allow foreign universities to setup international campuses in India. The proposal is to allow foreign universities to operate independently, award degrees and repatriate all profits which is strongly supported by many state governments as well. Government’s focus is on providing opportunities for millions of young Indians to receive quality education and employment skills. Government is committed to skill development of half a billion people by 2022(Export.gov, 2017).

Government strongly support collaboration between foreign universities and Indian universities in research and development. Government focus is on developing partnership with foreign universities in the field of mining technology, software development, pharmaceuticals and nanotechnology. UOW has recently joined hands with Indian state government of Gujarat to support Centre of Mining Excellence due to the university’s expertise in mining technology. Current political environment in India is very favourable for UOW to setup an international campus in India.

Economic Environment

India is the third largest economy by purchasing power parity and seventh largest in the world in terms of nominal Gross Domestic Product (GDP). India is considered as one of the major economy in G-20 nations. During the last five years, Indian economy has experienced a growth rate of 7-8% per annum and it is expected to grow at the same rate for at least next five years. The driver behind country’s economic expansion is its service sector which comprised of retail, telecommunications and information technology.

India is emerging as a very strong market for higher education and vocational training due to its service sector driven economy. The number of enrolments at educational institutes in India is the third largest in the world only behind China and the US. Education sector in India has witnessed a strong growth in the past 20 years and it continues to grow which gave rise to strong demand for higher education. Higher education sector in the past was dominated by government institutes, however admissions in private institutes have suddenly increased recently due to higher demand supply gap. It is estimated that education market in India will worth billions of dollars in upcoming years. Education market in India is becoming very lucrative and this is the best time for UOW to setup an international campus in India(Deloitte, September 2013).

Social and Cultural Environment

India is considered one of the youngest countries in the world with a median age of around 24 years. India’s potential workforce is estimated to reach one billion by 2025. Indian literacy rate is 74.04 % as compared to world literacy rate of 86.3%. Indian society is very diverse with many cultures, languages and religions. In India, religion plays an important role and people are very much influenced by it. Culture and Religion also have implications on education(Andy Bertsch, 2013). In the past, most of the students were only interested in engineering and medicine courses due to the influence of their family and friends. Nowadays students have started showing interest in variety of other courses such as journalism, hospitality, law and management.  There is a golden opportunity in India for UOW to offer specialised courses and quality education to millions of aspiring students.

Technological Environment

Technological changes can lead to innovation, better quality and less costs for the organisations. Internet and telecommunication technology is evolving very fast in India. Most of the country is served with 3G and 4G networks to support businesses. India has a powerful information technology sector which constantly provides new computer systems, software and technological advancements. India has all the infrastructure in place to provide world class teaching facilities like smart lecture theatres with audio video connectivity, e-learning and fast internet connection for the proposed international campus(Scholar, January 2016).

Legal Environment

Indian legal system is well developed and based on the Common law of England. Judicial system is fair, accountable and transparent. Taxation policies support foreign direct investment and international trade is governed by flexible regulations. Indian companies pay flat tax rate of 30%, however foreign companies pay flat tax rate of 40%.  The government has started projects like ‘E-Biz’ and ‘Invest India’ with an aim to facilitate investments from global investment community. Now only single application is required for multiple clearances to set up a new business in India. This is the best time for a foreign university like UOW to establish an Indian campus.

Conclusion

There is no doubt that international branch campus can be a financial risk for the Universities however, UOW is already running a very successful campus in Dubai. Lucrative Indian education market, favourable economic conditions, strong partnership with local IT industry and research collaboration with academic institutes are some of the potential success factors for UOW to open a campus in India.

References

1. ANDY BERTSCH, J. O., M.SAEED, SONNIE BATES AND ABM ABDULLAH 2013. Business Environment in India: An International Perspective Business Environment in India: An International Perspective Dhaka.
2. DELOITTE September 2013. Deloitte Foreign Universities in India. Touche Tohmatsu India Private Limited.

3. EXPORT.GOV. 2017. India Education Service [Online]. International trade administration. Available: https://www.export.gov/article?id=India-Education-Services [Accessed 25 March 2017].
4. HEALEY, N. October 19, 2015 The Conversation Academic rigour journalistic flair Universities that set up branch campuses in other countries are not colonisers [Online]. The Conversation Media Group Ltd. Available: http://theconversation.com/universities-that-set-up-branch-campuses-in-other-countries-are-not-colonisers-46289 [Accessed 22 March 2017].

5. MUNRO, K. 2017. Could building campuses offshore be the future for Australia’s universities? [Online]. Faltex Media. Available: http://www.smh.com.au/nsw/could-building-campuses-offshore-be-the-future-for-australias-universities-20160719-gq8wsv.html [Accessed 27 March 2017].

6. SCHOLAR, M. R. R. January 2016. “MAKE IN INDIA: PROSPECTS AND CHALLENGES” International Journal of Business Quantitative Economics and Applied Management Research, 2, 60.
7. TOHMATSU, D. T. October 2012. Indian Higher Education Sector Opportunities aplenty, growth unlimited! : ©2012 Deloitte Touche Tohmatsu India Private Limited.