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 Indian education sector is also considered as one of the major areas for investments as the entire education system is going through a process of renovation, according to a report 'Emerging Opportunities for Private and Foreign Participants in Higher Education' by PricewaterhouseCoopers (PwC).
The Ministry of Human Resources Development (MHRD) controls this segment. It requires affiliation or accreditation from either of the following bodies:
Education is one of the largest services market in India with a combined market size of more than 450 million students and revenue worth US$ 50 billion per annum, according to a report by research firm KPMG. The highly fragmented industry is projected to require an investment of about US$ 100 billion by 2014 to meet burgeoning demand. KPMG anticipates the sector to grow by around 10-15 per cent over 2011-2021.
"The Indian pre-school market is set to become the largest in the world. In India, the pre-school segment is currently worth US$ 750 million and is expected to reach US$ 1 billion by 2012," as told by Arun Arora, Chairman, Serra International Pre-Schools.
The expected market size of K-12 sector in 2012 is US$ 34 billion, with a rise of 14 per cent as compared to US$ 20 billion in 2008. The corresponding figures for the higher education sector are US$ 10.3 billion in 2012 registering an increase of 12 per cent as compared to US$ 6.5 billion in 2008. The coaching institutes in India will witness a 17 per cent increase from US$ 0.3 billion in 2008 to US$ 0.6 billion in 2012.
Vocational education/training 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.
The PE and venture capital investors have invested US$ 93 million into 10 education companies by July 2011, and are bullish about the sector's prospects going forward according to Venture Intelligence.
The Government of India has allowed foreign direct Investment (FDI) up to 100 per cent through the automatic route in the education sector.
According to data released by the Department of Industrial Policy and Promotion (DIPP), the education sector has attracted FDI worth Rs 2,306.13 crore (US$ 403.49 million) between April 2000 and January 2012.
Some of the major investments in education and training sector in India are as follows: