Recently the Government has announced many big-ticket reforms to be implemented in a month or so. One of the major among these is the free entry to A-grade global universities into India without any restriction. This will include foreign universities setting up courses or entire institutions in India. No doubt such a step will have a great impact on Indian education system especially the higher education.
Such actual presence of a foreign investor in a host country is known as Commercial Presence, which has been identified by World Trade Organization as one of the four main modes of trade in education which receive legal protection through General Agreement on Trade in Services. Prior to emergence of WTO there was no multilateral agreement on services. The trade agreement historically has been mainly about using the Tariffs.
A few years back some negotiations led to comprehensive agreement on International trade in services. The objective of this agreement is progressive liberalization of trade in services.
This agreement in general covers all the services (presently specified in 19 fields) including education services. Only when the services are provided entirely by the Government, they do not fall within the GATS rule. However, when the services have been provided by the Government partially or some prices are charged (as happens in education) or provided by the private establishment shall fall under the GATS rule.
It has been estimated that in 1990s 1.5 million students were studying abroad. The United States is a leading exporter of education service. Australia and UK are appearing as strong competitors of USA during the recent years. General alliance for Trade in education (GATE) has estimated education trade to touch US $ 50 billion in near future. All this is going to change dramatically once the commercial presence of institutions takes place in various countries.
US in particular is very keen to pursue the trade in education services, as it supports more than 4 million jobs in US economy and accounts as the 5th largest service sector of exports. But the question is how far Indian education system is ready to take on Global universities face to face? During the early 1990s some of the foreign universities attempted to market their programmes of higher education in India. Delegates of several countries visited India to market certain percentage of seats in Medical and Engineering education in India. Some foreign universities engaged the Indian agencies and firms to recruit students to study in their universities. Others started franchisee in India and still others offered programmes through distance mode- through print, computer, television and electronic mode .i.e. the virtual university.
All this did not make much difference to already existing Indian educational institutions.
But once the foreign universities set up their campuses here, local institutions will face a tough competition, both for students and experienced resource persons. Students will naturally prefer the foreign set-ups as they are going to have world class infrastructure and further the whole world of exposure will be at their foot step. Such facilities can not be provided by the local institutes except a few. No doubt the education will be quite costly but still it will be cheaper if compared to going out to another country for the same course of study. Thus the local set-ups can expect dwindling student strength in near future. Not only that, they are going to face the challenge of retaining their skilled and experienced staff members as they will be grabbed by the new establishments.
It is not difficult to guess why with regard to allowing foreign universities in India, only two IITs, six agricultural and eight general universities said yes. This is also a wake up call for Indian institutions to fasten their seat belts and either get ready to face the challenge or to take the downward plunge.
The issue of economic efficiency is also central to international trade in services. It is often said that the public sectors are mismanaged and therefore are economically inefficient. The main aim of the WTO is that the government monopoly should give way to competition. And once a Foreign Service provider has been allowed to provide a service in one country, there can not be any discrimination between Foreign Service provider and national/local service provider. With this the role of MHRD, UGC, NAAC, NIEPA, AIU, NGOs in the promotion of accredited transnational education of quality and relevance becomes very important. They will have to devise a mechanism of global and national certification and mutual recognition.
The sector competitiveness being one of the major concerns, all four modes of educational trade namely; consumption abroad, commercial presence, cross-border supply and presence of natural person will have to be kept in mind while developing the future strategies. And for best output it should be done timely and with utmost care.
• WTO. Education Sources. Background note by the Secretariat, September 1998.
• WTO. US proposal, Higher (Tertiary) Education, Adult Education and Training. December,2000.
• NIEPA. Internationalization of higher Education & Preparedness of Indian Universities- Quick Findings of a Survey. 2001.
• Sharma, G.D. Trade in Educational Services under WTO Regime- A Background Paper. 2005