Budget 2022 | Foreign universities allowed to operate in GIFT City, free from regulatory glare

Finance minister Nirmala Sitharaman on Tuesday announced that foreign universities will be allowed to operate from Gujarat International Finance Tec-City (GIFT) at Gandhinagar, without having to follow domestic rules.

This means the foreign universities won’t be regulated by local education watchdogs like UGC and AICTE, and will likely to be allowed to make and repatriate profit, say experts. They may also get tax incentives.

However, more clarity is awaited on rules related to this announcement that allows foreign universities to offer market-linked courses like financial management, fintech, science, technology, engineering and mathematics in the GIFT City.

The move is expected to bring some of the foreign varsities to India, who were exploring opportunities in the country for the last several years, but have stayed away due to "unfavourable" regulatory environment.

“World-class foreign universities and institutions will be allowed in the GIFT City to offer courses free from domestic regulations except those by IFSCA (International Financial Services Centres Authority) to facilitate availability of high-end human resources for financial services and technology,” Sitharaman said in her budget speech.

The move has split opinion -- while some believe it's a welcome step from an education reforms point of view, others argue this discriminates against domestic players.

Meeta Sengupta, an education expert, said there is a number of reasons why such an anouncement was made --one, Gandhinagar  has an education cluster thus offers condusive operational environmet;  two, the GIFT city will offer ease of doing business to foreign universities there.

"What the government is hinting at is we need manpower in key industry linked areas like fintech and deep tech, and foreign univerities can augment that capacity. But the announcement needs to clarify if they are only focusing on skill training and short duration courses, or they will also offer full fledged degrees as well," Sengupta added.

Tapan Ray, managing director and Group CEO of GIFT City said the “setting up of world class universities without any domestic regulation will facilitate skilled manpower in the financial services space. International arbitration centre will strengthen the dispute resolution mechanism at GIFT IFSC & enhance ease of doing business at GIFT”.

“Easing operations of foreign universities will not only enhance a student and learner’s exposure but will seamlessly integrate offline and online modes of education to enhance learning outcomes,” said Raghav Gupta, managing director of India and Asia-Pacific at Coursera, a global online education platform.

The budget move could also make GIFT City a springboard for launching into other states, said Akhil Shahani, managing director at Thadomal Shahani Centre for Management.

Prateek Bhargava, founder and chief executive of edtech firm Mindler, feels the step will make “such (market linked) education more accessible and affordable".

However, some fear the move will skew the playing field against private education providers.

"Allowing foreign universities is a net positive, but why not put everyone on the same pedestal in terms of regulations, revenue and tax treatment," said a private education player, who did not wish to be named.

To be sure, the proposal and intention to allow foreign univeristies to operate in India has been on the anvil for more than 12 years.

Even, the National Education Policy 2020 has underlined the need for allowing foreign universities in India, and allowing local varsities to establish campuses abroad. And that a formal legislative framework will have to be developed for operationalising this.

Gujarat’s GIFT City consists of a multi-service SEZ (Special Economic Zone) and an exclusive domestic area, according to the official website.

It is an integrated development on 886 acres of land with 62 million square feet of built-up area, which includes office spaces, residential apartments, schools, hospital, hotels, clubs, retail and recreational facilities, which makes it a truly “walk to work” city.