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Education Sector in India

June, 2013


In India, education is the key to the task of nation-building. Availability of right knowledge and skills to the youth can ensure the overall national progress and economic growth.

The Indian education system is one of the largest in the world. The education sector is divided into two main segments; the core segment comprises of schools and higher education, while the non-core comprises of coaching classes, pre-schools and vocational trainings.

The primary education is a basic enabling factor for participation and freedom, for trading a life with dignity and overcoming basic deprivation and secondary education is the gateway for prosperity, for transforming the economy and establishing social justice in any country. The policy at present is to make secondary education of good quality available, accessible and affordable to all young persons in the age group of 14 – 18 years.

Vocational education/training in India is gathering huge investments from corporate and private equity (PE) firms as the methodology and technology pertaining to this sector is witnessing significant improvements. Enhancement in the demand and supply of online and correspondence courses, facilitation by government and quality improvement are the factors driving the vocational training segment.

Market Size

Education market in India currently stands at a year-on-year (YoY) growth of 15 per cent. However there is a further demand of investments worth US$ 100 billion by 2014 for construction and provisioning of education facilities especially in K – 12 and higher education segments, according to a report titled ‘Indian Education Investment Report 2013’.

The private education sector is estimated to reach US$ 70 billion by 2013 and US$ 115 billion by 2018, according to consulting firm Technopak. Technopak sees enrollments in Kindergarten-12th grade (K-12) growing to 351 million, requiring an additional 34 million seats by 2018.

Pre-school business in India is expected to touch Rs 13,300 crore (US$ 2.20 billion) by 2015-16, out of which branded pre-schools are expected to contribute about Rs 4,500 crore (US$ 747.66 million), according to a report by Crisil.

Further, according to the report '40 million by 2020: Preparing for a new paradigm in Indian Higher Education' released by Ernst & Young, the higher education sector in India is expected to witness a growth of 18.0 per cent CAGR till 2020. At present, the sector witnesses spends of more than Rs 46,200 crore (US$ 7.68 billion), which is estimated to grow at an average rate of more than 18.0 per cent to over Rs 232,500 crore (US$ 38.63 billion) in 10 years.


The education sector has attracted foreign direct investments (FDI) worth Rs 3,332.97 crore (US$ 552.09 million) during April 2000 to March 2013, according to the data released by the Department of Industrial Policy and Promotion (DIPP).

Realising the fast growth of education sector in India, many private companies are looking for relevant acquisitions and alliances in this space. Major investments are being seen in the areas of pre-schools, private coaching and tutoring, teacher training, the development and provision of multimedia content, educational software development, skill enhancement, IT training and e-learning

Some of the major investments in Education and Training Sector in India are as follows:

  • InOpen Technologies has entered into a partnership with Japan-based Benesse Holdings to deliver game-based computer science lessons to students in Silicon Valley schools
  • IIM-Kozhikode has signed a memorandum of understanding (MoU) with Plymouth University of the UK. The MoU will facilitate exchange of students and faculty members
  • Manipal Group has signed a MoU with Durban University of Technology in South Africa to foster collaboration between the two institutions in the areas of health sciences, teacher training, online education, business management, engineering and design architecture
  • As many as 30 colleges across Kerala have signed up for a live, digital distance learning platform. The will help students gain access to job-oriented courses and training for competitive examinations
  • Mexican edutainment theme park brand KidZania is set to see the soft launch of its property in Mumbai. Its Indian franchisee, ImagiNation Edutainment India, has entered into a partnership with Birla Sun Life Insurance for an employment centre at the park