Proposed regulations for foreign universities must take a holistic view to benefit students

The UGC has released draft regulations for the setting up of campuses of foreign universities/foreign educational institutions in India. (Representative image)

The National Education Policy, 2020 (NEP) which aims to overhaul the education system in India, amongst other things, sets out India’s intent to be promoted as a global study destination providing premium education at affordable cost. NEP also states that a legislative framework facilitating the entry of top global universities will be put in place and that these universities will be given special dispensation regarding regulatory, governance, and content norms on par with other autonomous institutions of India.

Building on the above objectives, the University Grants Commission (UGC), the regulatory body for higher education in India has released draft regulations for the setting up of campuses of foreign universities/foreign educational institutions in India, titled UGC (Setting up and Operation of Campuses of Foreign Higher Educational Institutions in India) Regulations, 2023.

The key features of the draft regulations include:

- Foreign Higher Educational Institutions/Universities (FHEIs) will require the approval of the UGC to set up campuses in India.

- The campus should be set up within two years from the date of approval.

- FHEIs will first be given permission to operate for a period of ten years. They must submit a request for approval renewal at the conclusion of the ninth year.

- Only offline courses will be allowed.

- The FHEI shall not offer any such programme of study which jeopardises the national interest of India or the standards of higher education in India. Further, the operation of FHEI shall not be contrary to the sovereignty and integrity of India, the security of the state, friendly relations with foreign states, public order, decency, or morality.

- FHEIs will have complete autonomy to recruit faculty and other staff members either from abroad or India and the liberty of deciding their fee structure, admission processes and criteria.

- The draft regulations have enumerated that the cross-border movement of funds and maintenance of foreign currency accounts, mode of payments, remittance, repatriation, and sale of proceeds, if any, shall be as per the Foreign Exchange Management Act, 1999 and its rules.

- The commission will have the authority to continually inspect the campus and its operations to evaluate the facilities, academic programmes, and overall quality and suitability. If any norms are not adhered to, the commission may act at any time by levying fines and/or suspending or withdrawing approval. Further, if students’ grievances are not addressed by the FHEI, the students may appeal to the UGC.

- UGC will decide on any question as to the interpretation of the Regulations and its decision shall be final.

While the draft regulations are a key initiative under the NEP, several key issues require consideration and an unambiguous roadmap for effective implementation.

The FHEIs are required to set up their campus in India within two years. Given that each state has its own regulatory framework and approvals for land and infrastructure-related development and socio-geo-political complexity, it is unlikely that FHEIs will be able to set up new campuses in India on their own within the allotted timeframe. Likely local partnerships and/or collaboration/ takeover of existing infrastructure will be required. Further, the legal structure of FHEI will need to be addressed from a regulatory perspective. As an illustration, the regulations should provide if an FHEI can be set up as a joint venture entity and/or as a profit-making company/LLP, which is permitted to repatriate profits. Another aspect to be considered is if any financial incentive would be provided to the FHEI to set up its campuses in India.

While UGC is the umbrella body to oversee the effective implementation of regulations, granting unequivocal authority to UGC to interpret the regulations may act as a deterrent for several FHEIs. It is well known that several FHEIs have a robust tradition of debate and discussions on topical issues, research and scientific studies on controversial issues, and providing UGC with the ability to evaluate the courses offered/levy fines, especially under the heads of “national interest of India” “public order”, “decency”, or “morality” or permitting students to address their grievances to UGC without clearly setting the parameters may be detrimental.

On the flip side, parity should be created between the Indian educational institutions (especially those that are unaided by the government) and FHEI in terms of their regulatory and operational framework. It would be unfair if FHEI could be set up as “a profit” entity while unaided private educational institutions continue to remain “not-for-profit” organisations.

Similarly, with respect to the fees and other costs, general guidelines should be provided so that the fees do not become prohibitive for students, thereby defeating the whole purpose of making India a global destination for premium education at an affordable cost. Regulation or guidelines on fees for faculty or administrative members is also an important consideration, as there may be an exodus of faculty members from existing Indian educational institutions jeopardising imparting of education to students already enrolled in their existing colleges.

In the world of a ‘hybrid workforce’, a complete prohibition on online courses should be reconsidered and a combination of online/offline classes may be considered: (i) to allow flexibility to students, and (ii) offer a reduction in operational costs/ fees for students.

To conclude, while the draft regulations are in line with the objectives of NEP, the government needs to take a holistic view of the likely impact of these regulations given the demographics and social fabric of India and promulgate neutral legislation that provides a level playing field for all stakeholders – most importantly, the most deserving beneficiaries - the youth of India.

(With inputs from Ayushi Shah)

Yashojit Mitra is Partner, Devyani Singh is Director and Ayushi Shah is Advocate at Economic Laws Practice. Views are personal, and do not represent the stand of this publication.