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Education Sector in India

December, 2012


In India, education is the key to the task of nation-building. It is also a well-accepted fact that providing the right knowledge and skills to the youth can ensure the overall national progress and economic growth. The Indian education system recognises the role of education in instilling the values of secularism, egalitarianism, respect for democratic traditions and civil liberties and quest for justice.

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 role of Universal Elementary Education (UEE) for strengthening the social fabric of democracy through provision of equal opportunities to all has been accepted since the inception of our Republic. India initiated a wide range of programmes for achieving the goal of UEE through several schematic and programme interventions, such as Operation Black Board, District Primary Education Programme etc.

While primary education is a basic enabling factor for participation and freedom, for trading a life with dignity and overcoming basic deprivation, secondary education and vocational training is the gateway for prosperity, for transforming the economy and establishing social justice in any country.

Market Size

The education sector in India is evolving, led by the emergence of new niche sectors like vocational training, finishing schools, child-skill enhancement and e-learning.

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.

According to a report 'Education in India: Securing the demographic dividend,' published by Grant Thorton, the primary and secondary education, or K-12 sector is expected to reach US$ 50 billion in 2015 from US$ 24.5 billion in 2008, growing at an estimated compound annual growth rate (CAGR) of 14 per cent.

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$ 8.38 billion), which is estimated to grow at an average rate of more than 18.0 per cent to over Rs 232,500 crore (US$ 42.17 billion) in 10 years.


The education sector in India is also considered as one of the major areas for investments as the entire education system is going through a process of overhaul, according to a report ‘Emerging Opportunities for Private and Foreign Participants in Higher Education’ by PricewaterhouseCoopers (PwC).

The Government of India has allowed foreign direct Investment (FDI) up to 100 per cent through the automatic route in the education sector.

The education sector has attracted FDI worth Rs 170.09 crore (US$ 30.85 million) in May 2012.

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

  • The Shiv Nadar University has tied up with Duke University of North Carolina. The alliance will pave way for the two institutions to partner in academic programmes and experiential learning opportunities
  • Indian Institute of Management-Calcutta (IIM-C) has become the first institute in India to tie up with CEMS, an international alliance of management institutes across 28 countries in the world
  • BSE Institute Ltd (BIL), Mumbai, and National University of Advanced Legal Studies (NUALS), Kochi have signed a memorandum of understanding (MoU) to offer multiple programs in financial and securities law
  • Manipal University has signed agreements with Shanghai's Tongji and Tianjin universities for mutual, comprehensive partnerships. "It is a step towards Manipal University's long-term plan of opening the first-ever campus of an Indian university in China," said Mr K Ramnarayan, Vice-Chancellor, Manipal University
  • S P Jain School of Global Management has launched its third international campus at the Sydney Olympic Park, Australia. "Business has gone global and business schools need to go global too," said Mr Nitish Jain, President, S P Jain