The government has finally given its approval to the Foreign Educational Institutions Regulation of Entry and Operations, (Maintenance of Quality and Prevention of Commercialization) Bill 2010 (“Bill”). The bill seeks to regulate entry, operation and restriction of foreign universities in India. However shortly after the Union Cabinet cleared the long-pending draft bill that allows foreign education providers to set up campuses in India and offer degrees independently, most of the Indian opposition parties objected to the bill, slamming it as “commercially driven” and one that would breed inequity. As long as the opposition concerns over issues such as equivalence/parity of degrees, fee structures and equity in terms of access to all students remains, passage of the bill in the Parliament looks tough.
Though, the present FDI policy allows 100% foreign investment in the education sector including higher education, foreign universities are currently not allowed to directly offer degree courses in India. It is estimated that nearly 150 foreign institutes offer courses with Indian varsities under a twinning arrangement, i.e. a part of the course in India and remaining abroad but most of them do not have all required accreditation from the regulatory bodies. The existing arrangements are regulated by the All India Council for Technical Education Regulations for Entry and Operations of Foreign Universities in India Imparting Technical Education, 2005 (“Foreign Universities Regulations”), which is presently applicable only to technical and management institutes.
Some of the reported provisions forming part of the present bill approved by the Union Cabinet include:
• Different levels of registration process for getting registered with the University Grants Commission (“UGC”) or any like regulatory body. Subject to necessary approvals by the UGC, a foreign university could be registered as a ‘deemed university’ under the relevant provisions of University Grants Commission Act, 1956.
• A corpus fund of INR 50 Crore (US$ 10 Million Appox.) is required to be deposited by intending foreign university;
• Such foreign universities would be established as “not for profit” companies under Section 25 of the Companies Act and thus cannot take the profit back. Similar provisions are applicable to Indian private universities and deemed universities as profit making activities in education sector is frowned upon by the regulators;
• Foreign universities can however provide consultancy services, faculty development and other like activities and the profit generated from those projects can be repatriated back. Similar structures are being adopted by Indian private universities;
• a time bound process for granting approval to foreign educational institutions to set up campuses;
• scrutiny of proposals of aspiring institutions on the basis of their previous experience, faculty strength, reputation etc;
• Quota laws providing reservation for Scheduled Castes, Scheduled Tribes and Other Backward Classes, may not be applicable to foreign universities setting up campuses in India.
