New British Council report underlines the importance of – and increasing competition for – Indian students

Consider these predictions for India in 2028:

• Half of the country’s population will be younger than 25;
• The country is expected to become the world’s most populous nation, displacing China from top spot in this regard;
• It will boast the world’s largest university entrance-aged cohort.

These trends set the context for a new study by the British Council, Inside India: A New Status Quo. The study was conducted over the past three months, and more than 10,000 young Indians participated in it. Available for purchase from the British Council, it provides insight into young Indians’ attitudes about higher education in India as well as abroad, and it reveals the factors that affect their choices regarding where to go to university. The study notes continued interest among young Indians in studying abroad, but also explores various factors that may alter their course – most notably, toward staying in India for their studies or choosing other destinations. This ICEF Monitor article will look at the topline results of the study and what they may mean for study abroad destinations and institutions.

UK and US remain top choices for Indian students, but costs are a worry

The Inside India study found that the UK is the preferred destination for young Indian students, chosen by 21%. The US is a close second at 19%, while India itself was chosen by 14%. Indians wishing to study in business or administrative courses were the most likely to say the UK is their first choice of study destination. Indians make up the second largest contingent of students in UK and US institutions, after Chinese students. The UK remaining in top place offers some good news for UK educators, who have witnessed the effects of more stringent visa policies – among other things – on Indian applicants in recent years. 2011-12 witnessed a dramatic 23.5% drop in the number of Indian students studying in British institutions. The US, too, saw a decline in Indian student numbers, but much less severe (-4%). For UK as well as US institutions known for the quality of education they provide, it will also be heartening to know that “quality” trumps all for Indian students looking at where to study: 61% said this was the most important factor. But mitigating this enthusiasm for quality are cost issues, cited by 42% as a selection factor; in addition, fully two-thirds said high cost and lack of scholarships are the greatest deterrents to studying abroad. Importantly for education institutions, 43% said they would be influenced by scholarship opportunities. The report warns:

“India has always been a very price sensitive market, but never more so than now.”

The cost of an education in the US and UK has gone up substantially in the last couple of years for Indians. The study estimates that the rupee’s huge fall in August 2013 against the US dollar increased the cost of an overseas education by roughly US$10,000 annually, and an earlier post on ICEF Monitor further explores the effects of the falling rupee.

What worries about cost may mean

If cost proves to be too much of a deterrent for an Indian student, there are certainly more exciting educational options within India than there used to be. As reported by University World News, the Inside India report notes:

“India has many aspiring world-class higher education institutions competing for globally ranked positions alongside those in the UK and the US, and a far smaller proportion of households that can afford to pay for overseas education in an increasingly competitive recruitment market.”

However, while India's goal is to have more high-quality higher education institutions in the country, there remains a steep uphill climb; the Indian government announced education funding cutbacks this year and capacity, quality, and access issues persist. For talented Indian students choosing not to stay in India but electing to not make the leap to traditional leading destinations in the UK or North America, there are many more education options within Asia. A recent ICEF Monitor article on Hong Kong and other emerging education hubs included these facts:

• The number of Asian universities in QS’s global top 200 has increased by 17% during the last five years;
• The number of Asian institutions in their global top 50 has grown from nine to eleven;
• Asia boasts five of the world’s top six “young” institutions (universities established since 1963) according to the QS Top 50 Under 50 ranking.

Also vying for Indian students is Australia, another region much closer to India than the UK or the US. The newspaper The Australian, reporting on the Inside India study, notes that in the same period the UK and the US registered their declines in Indian students, “demand for Australian places increased by 36% despite Australia being the destination with the highest living costs.” The Australian quotes the Inside India study as explaining:

“The recent increase in students studying in Australia has happened when the currency valuation makes living costs very expensive. However, work opportunities seem to have mitigated the effect of high costs of living and the negative sentiment created in 2009-10.”

For more on Australia’s growing focus on improving its competitiveness among international students, you can read the ICEF Monitor article, “Australian government eases visa rules for the non-university sector.”

The new competitive landscape for attracting Indian students

Richard Everitt, the Director of Education & Society for British Council in India, said the Inside India study’s findings mean the following:

“We are entering a new era where traditional flows are being disrupted for a number of reasons. Yes, the UK is the number one choice for young Indians who want to study overseas, but there are new dynamics coming into play. UK universities may want to consider how they are demonstrating their quality, their value for money and related incentives. They could also seek to highlight industry links, including internships, that relate to employability,” he said.

Indeed, the Inside India study found that 23% of its young Indian respondents said the option to work in a host country during studies and after was important to them. Australia’s international education sector seems to be recognising this opportunity in its continual lobbying for government to ease work and immigration policies. Canada, too, is realising the importance of work opportunities in increasing its attractiveness to international students; Canada’s relative affordability has also helped it to climb up the rankings of “most attractive study destination” in the past two installments of the ICEF igraduate Agent Barometer. ICEF Monitor has reported throughout the year, in fact, on the growing importance of internships for ambitious international students. In conclusion, it seems that a host of factors other than quality alone are going to be important to woo Indian students away from options within India. We devoted an entire article in 2012 to how foreign educational stakeholders can offset the challenge of the rupee’s slide and recognise Indian students' increased financial pressures. We wrote:

“If some institutions and even country markets stand to lose from Indian students’ greater caution, others stand to gain. How will your institution approach the situation? Will it adopt new pricing policies for Indian students, such as discounting, financial aid or staggered payment terms? How will it affect your strategies regarding recruiting students from India?”

These questions have – if anything – become more important today than they were in 2012. With a potential market this large, new thinking on the Indian market and how to attract Indian students will become ever more pressing questions for educators and recruiters worldwide.