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Education Sector in India

December, 2014


Education of a nation is one of the foremost requirements for its development. India’s advantage of having a large population of youth presents a huge opportunity to the players in the education sector as well as scope to the government for development of this sector and consequently, the country.

Several factors such as growing income levels and favourable foreign policies have attracted many foreign players into the Indian education market. The Government of India has also taken several initiatives to provide quality education to the youth in the country.

A Deloitte study has recognised the Indian education sector as a 'sunrise sector' for investments. This is because this sector offers huge potential to investors in the regulated as well as non-regulated markets. The vast diversity in ethnicities coupled with varying demographics has prompted different players to invest in the sector.

Market Size

The education market in India, which is presently worth around Rs 5.9 trillion (US$ 92.98 billion), is poised for some major growth in the years to come, as by 2020, India will have the world's largest tertiary-age population, and second largest graduate talent pipeline globally. Presently, higher education contributes 59.7 per cent of the market size, school education 38.1 per cent, pre-school segment 1.6 per cent, and technology and multi-media the remaining 0.6 per cent. The higher education sector in India is poised for an average growth of 18 per cent per year till 2020.

The education sector in India has earned global recognition from several quarters. For instance, the Mumbai University has featured in the world top 10 list for institutes with billionaire alumni and is ranked ninth, according to a report by Wealth-X and UBS.

Due to the growth advantages, this sector has also received number of investments from several foreign organisations. In the period from April 2000—September, 2014, the education sector in India has attracted FDI equity to the tune of US$ 964.03 million, according to the Department of Industrial Policies and Promotion (DIPP).


The education and training sector in India has witnessed some major investments and developments in the recent past. Some of them are:

  • Safran, a global aerospace and defence company has announced the research and development (R&D) collaborations with Foundation for Innovation and Technology Transfer (IIT, Delhi), and Society for Innovation and Development (IISc, Bangalore) to initiate research and development in the field of advanced avionics systems for the development of next generation aerospace technologies.
  • Vietnam is looking forward to Indian investment in several of its sectors where India has advantages such as infrastructure, power, IT, education and pharmaceutical research sectors.
  • Aspada Investment Co has invested around US$ 1.8 million in PI Policy Innovations Pvt Ltd, which is a school test design and assessment company. The company provides assessments, test design and feedback solutions for primary and secondary education schools in India.
  • In line with its strategy to deepen partnerships with global academic institutes, Infosys has set up a US$ 2 million fund along with Princeton University, which will enable up to two scholars to pursue research at the University’s Institute of Advanced Study.
  • Infosys Ltd has entered into a strategic partnership with Stanford University's Institute for Computational and Mathematical Engineering (ICME) to research on industry issues with the use of data science and analytics. Under this arrangement, Infosys will work with ICME to develop curriculum in data science and analytics, focused on real-world problem areas, in addition to the research on solving industry issues
  • The University of Cambridge through the department of Cambridge English Language Assessment has signed memorandums of understandings (MoU) with some Indian institutes. The Cambridge English department works with 200 technical institutions in India in addition to companies which conduct assessments for employees.
  • The Government of Victoria has planned to sign an agreement with the Government of India to deliver retail training in India. This will enable the ARA Retail Institute to partner with India’s peak organisation for retailers, the Retail Association of India, to deliver retail training in Maharashtra over the next three years.

Government Initiatives

The Government of India is all set to roll out a new educational policy by year 2015, according to Ms Smriti Irani, Union Minister of Human resource Development (HRD), Government of India.

Some of the other major initiatives taken by the Indian government in the recent past are:

  • To make learning more holistic, the Government of India has decided to introduce a credit transfer scheme in the education system. The HRD Ministry is also working towards setting up placement cells at all central varsities in the country.
  • The Government of India has launched the first Skill Development Training programs of Maulana Azad National Academy for Skills (MANAS) on pilot basis. In this regard two memoranda of understanding (MOUs) were signed by MANAS, one with the representatives of Health Sector Council and the other with Security Sector Council.
  • Funded by the National Mission on Education through ICT (NMICT), the Indian Institute of Technology-Bombay (IIT-B) has developed a prototype of a 10.1-inch netbook that costs less than US$ 100. The device is aimed primarily at programmers, students and teachers in government-run colleges and institutions.
  • The Government of India has given its approval to sign a joint declaration with the United States of America to initiate a programme called Global Initiative of Academic Networks (GIAN) in the field of higher education.

Road Ahead

Higher education in India is undergoing a huge change since last decade. There are over 600 million people in India, under 25 years’ old, potential candidates who would continue education, given the right kind of opportunity and convenience.

The Government of India has taken several steps including opening of IIT’s and IIM’s in new locations as well as allocating educational grants for research scholars in most government institutions. Furthermore, with online modes of education being used by several educational organisations, the higher education sector in India is set for some major changes and developments in the years to come.

Exchange rate used INR 1= 0.0157 as on December 23, 2014

References: Ministry of Finance, Press Information Bureau (PIB), Media Report, Ministry of Education, Department of Industrial Policy & Promotion (DIPP)