India may retain $113 bn forex as foreign universities set up campuses

A Knight Frank-Deloitte report says foreign universities establishing campuses in India could help retain $113 billion in foreign currency by 2040, easing large outflows for overseas education

Foreign universities setting up campuses in India can help it retain an estimated $113 billion in foreign currency by 2040, significantly reducing remittance outflows currently lost to overseas education.

 

“This economic retention is supported by a tangible real estate footprint. In the first phase, FHEIs are expected to adopt a vertical campus model within commercial Grade A office hubs, generating a space requirement of 19 million square feet by 2040,” a joint report by Knight Frank and Deloitte stated. 

While 18 foreign higher education institutes (FHEIs) have already received government approval to set up campuses in India, the report added that further expansion will necessitate more investment in physical infrastructure. 

 

Driven by the National Education Policy 2020, this shift may transform India from a student-exporting nation to a global knowledge hub as demand surges with 53 million students currently enrolled in tertiary education.

 

“To meet the government target of a 50 per cent gross enrolment ratio by 2035, enrolment will rise to about 72 million,” the report estimated.

 

The report highlighted that this comes at a time when there is a critical shortage of opportunities in elite education.

 

“In 2025, while approximately 54,000 students successfully cleared all levels of the JEE for engineering, the prestigious Indian Institutes of Technology (IITs) could only offer 18,000 seats, highlighting a stark mismatch between student aspirations and available high-quality infrastructure,” the report said.

 

However, long-term sustainability for foreign campuses will depend on prioritising academic portfolio over enrolment volume, with a focus on STEM, AI, data science and management.

 

India’s emergence as a global education hub also comes as universities in advanced economies grapple with challenges such as demographic shifts, rising costs and funding constraints.

 

According to the report, higher education institutes in the Americas and Europe, which together account for up to 72 per cent of the world’s top-50 universities, are facing a “demographic cliff”, leading to fewer high school graduates entering the system, thereby shrinking the domestic student pipeline.

 

“While international students have traditionally acted as a buffer to this downward pressure on domestic enrolment, mobility has weakened in recent years due to geopolitical uncertainties and shifting diplomatic priorities,” it stated.

 

This has led to visa restrictions, tighter immigration policies and limits on post-study work rights, introducing uncertainty into enrolment flows.

 

To diversify income sources beyond tuition and government support, the report said FHEIs may increasingly invest in offshore campuses across developing economies to tap into the favourable demographic dividend and rising demand for higher education.

 

“Talent and governance success depend on building robust faculty pipelines and governance models that preserve academic autonomy while aligning with Indian regulations,” the report added.