Education Industry in India – Business Opportunities and Advantages

India's education sector holds vast potential for growth, driven by a significant portion of the population in the 0-14 age group and substantial investments highlighted in the Union Budget 2023-24. With an aim to achieve a Gross Enrolment Ratio of 50% by 2035, there's ample room for expansion, especially in online education, which is projected to grow substantially. The Indian edtech market, currently valued at USD 117 billion, is expected to reach USD 313 billion by FY30, attracting considerable private equity investments. India's education system is witnessing a transformation under the National Education Policy, 2020, emphasizing holistic development and international collaborations. With favourable FDI policies and potential for foreign universities to establish campuses, India is positioned to become a significant player in the global education landscape.

Market Insights

India's education and skills market is poised for significant growth, expected to double from USD 180 billion in 2020 to USD 313 billion by 2030. This expansion is forecasted to create 5 million new jobs and benefit 429 million learners. The number of private schools has increased from 325,760 in 2018-19 to 335,844 in 2021-22, reflecting the sector's growth. With over 580 million individuals aged 5 to 24 years, India has a substantial market for education. Government initiatives, including the National Education Policy (NEP), aim to improve educational outcomes, with notable achievements such as achieving a 100% gross enrolment ratio at the primary level. India's academic institutions are gaining global recognition, with 101 Indian institutions qualifying for the Times Higher Education World University Rankings 2024. Bilateral agreements, like the Framework Mechanism for Mutual Recognition of Qualifications between India and Australia, aim to enhance collaboration and investment opportunities in the education sector.

School Education in India

The new education policy emphasizes early childhood care and education, proposing a shift to a 5+3+3+4 curricular framework aligned with ages 3-18. Introduced by Union Minister of Education Mr. Dharmendra Pradhan in August 2023, the National Curriculum Framework for School Education (NCF) aims to enhance academic performance, with biannual board exams and the establishment of PARAKH for comprehensive evaluation. India has 1,489,115 schools, with government schools comprising 70%. Disparities in education quality persist, as highlighted by UNESCO's report, indicating a higher Pupil Teacher Ratio (PTR) in senior secondary schools compared to the overall system. The Union Cabinet's approval for the Samagra Shiksha School Education Scheme's continuation until 2026 underscores the government's commitment to strengthening the education sector.

Higher Education

In FY24, India witnessed a significant increase in the number of colleges, reaching 49,385 from 43,796 in FY21 and 42,343 in FY20. Similarly, the count of universities rose to 1,196 by FY24, up from 760 in FY15. With 41.38 million students enrolled in higher education during the 2020-21 academic year, India has one of the world's largest higher education systems, a notable increase from the previous year's 38.5 million. The National Education Policy (NEP) 2020 aims to raise the Gross Enrolment Ratio (GER) to 50% by 2035, with plans to add 3.5 crore new seats to higher education institutions. India's higher education landscape is evolving, with a growing presence of state private and private deemed universities, comprising 34.4% and 6.8% of total universities, respectively. The university mix includes 439 State Universities, 124 Deemed to be Universities, 54 Central Universities, and 412 Private Universities. Additionally, there were 8,902 institutes approved by the All India Council for Technical Education (AICTE) in the academic year 2022-23, collectively enrolling 3 million students, indicating the dynamic expansion of India's higher education sector.

Recent Trends

• K-12 Segment - The education sector in India is undergoing significant transformations, with increasing collaboration between private Indian entities and global brands to deliver international educational standards. As technological advancements like AI, ML, IoT, and blockchain gain prominence, the sector is embracing Education 4.0, aiming to foster inclusive learning and enhance employability. Recognized by UNESCO for their effective use of ICT during the pandemic, government initiatives like PM eVIDYA are driving innovation. However, challenges persist, including low enrolment rates in senior classes and a rising dropout rate among girls, prompting private schools to explore franchise models for sustainability.
• Higher Education Segment - Higher education institutions in India are increasingly focusing on developing online programs to meet the growing demand, as evidenced by the projected substantial growth of the online education market. Government initiatives, such as the free AI training course introduced under the India 2.0 initiative, and offerings like the online MA program in Sustainability Science by IGNOU, underscore the commitment to expanding online learning opportunities. Moreover, universities are responding to the preference for industry-oriented qualifications by offering specialized degrees, contributing to the notable rise in total enrolment in higher education. Additionally, efforts by the Ministry of Education and the University Grants Commission to streamline processes demonstrate a concerted push towards enhancing the quality and accessibility of higher education in India.
• Vocational Training Segment - Several significant initiatives are underway in India's education sector, aiming to enhance vocational education, entrepreneurship, and adult literacy. The National Education Policy (NEP) underscores the focus on vocational education, supported by partnerships like the "Education to Entrepreneurship" collaboration launched by the Ministry of Education, Ministry of Skill Development and Entrepreneurship, and Meta. Additionally, efforts such as the "New India Literacy Programme" align with NEP objectives. Moreover, advancements like UnfoldU Group's foray into Metaverse education and the 'Sahakar Pragya' initiative led by Minister Narendra Singh Tomar demonstrate the sector's commitment to innovation and inclusivity, particularly in rural areas.

Growth Strategies

• Scholarships: Australia's Maitri initiative offers scholarships and cultural exchange programs benefiting 45 Indian students, covering all educational and living expenses. The University of East Anglia introduced the Sonny Mehta India scholarship, providing fully funded opportunities for promising Indian writers.
• Online Solutions: Educomp offers a variety of online and supplemental solutions to empower institutions in leveraging technology for enhanced learning experiences. Dish TV integrates 32 educational channels from the Ministry of Education onto its platform, expanding access to educational content. Plastic Water Labs developed a virtual reality platform for deeper understanding of science and mathematics concepts. WhizJuniors introduced WhizGoogler, aiding students in navigating the internet efficiently for technological resources.
• Joint Ventures: GMR Aviation Academy partners with Emirates Group Security to provide aviation and security courses in India. Indian institutions seek partnerships with Australian counterparts for quality education. BITS School of Management collaborates with the London Business School to enrich student programs. Bharti AXA Life teams up with Great Learning to design and deliver a Post Graduate Program focused on life insurance sales.

Why Invest in India?

• Policy Support: India allows 100% FDI in education through the automatic route and has introduced bills like the National Accreditation Regulatory Authority Bill and the Foreign Educational Institutions Bill. Government schemes like RISE and EQUIP address sector challenges.
• Robust Demand: India's large population aged 5-24 presents a significant opportunity, with over 250 million students enrolled in schools. The country needs to establish additional schools, colleges, universities, and vocational training centers to bridge the demand-supply gap. The 'Study In India' program witnessed a 146% increase in applications in 2021.
• Competitive Advantage: India's substantial English-speaking population facilitates seamless delivery of educational products, ranking 52 out of 111 countries in the English Proficiency Index 2022. Nine prestigious Indian institutes, including IISc and eight IITs, rank among the top 500 universities in the QS World University Rankings 2023.
• Increased Investments: India's education market is projected to reach USD 225 billion by FY 2025, with FDI equity inflow totaling USD 9.44 billion between April 2000 and September 2023. The edtech sector has attracted over USD 4 billion in private equity investments in the past five years, with startups securing USD 3.94 billion in FY 2022. PhysicsWallah became India's 101st unicorn in June 2022 after raising USD 100 million.

Growth Drivers

• Favorable Government Policies
• Robust Technology Infrastructure
• Strong English Proficiency
• Enhanced Higher Education Ecosystem
• IFSC GIFT City

Key Government Policies and Support

• Union Budget 2023-24: Allocated INR 68,804.85 crore for education, up 13.06% from previous year. Samagra Shiksha Scheme saw a 20.3% increase in funding.
• National Education Policy 2020 (NEP): Aims for holistic, flexible learning. Introduced NDEAR and National Education Technology Forum.
• NEP 2020 Implementation: Universities aligning curricula, NIPUN Bharat initiative for foundational literacy, and Academic Bank of Credits introduced.
• Partnerships: Mahatma Gandhi National Fellowship, Vocationalisation of School Education, and international collaborations with countries like Japan.
• Ayurveda PGs: Allowed to perform general surgery, expanding their scope of practice.
• Jawahar Navodaya Vidyalayas: Construction initiated for free, quality education for underprivileged children.
• Pradhan Mantri Kaushal Vikas Yojana: Phase 3 (PMKVY 3.0) introduced over 300 skill courses for eight lakh candidates.
• NISHTHA 3.0: Program for teacher and school administrator skill enhancement.
• Women's Personality Development: Capacity-building program for women undergraduate and postgraduate students.
• Alternative Academic Calendar: NCERT's AAC for engaging students during COVID-19 with digital and traditional tools.
• Foundational Mathematics Course: Free courses by NSDC and Khan Academy India to enhance mathematics skills.
• Rail Kaushal Vikas Yojana: Entry-level training in railway-relevant skills.
• STARS: World Bank-supported project to strengthen teaching-learning in six states.
• MyNEP2020 Platform: Engages stakeholders for educational standards and mentoring programs.
• Skill Development: Joint working group with Zimbabwe, Impact Bond by NSDC, and BYJU'S partnership for aspirational districts.
• National Curriculum Framework for School Education (NCF-SE): Unveiled by Mr. Dharmendra Pradhan, aligns with NEP 2020 objectives.

Rising Investments

Over the last two decades, private investments in India's education sector surged significantly, notably in the edtech domain. Byju’s, a leading player, raised substantial funds, including USD 250 million in October 2022. Other notable investments include Sunstone and PhysicsWallah, both securing significant amounts. Byju’s also made strategic acquisitions, like Gradeup, to expand its global presence. Unacademy's recognition as the top startup in 2021 further highlights the sector's rapid growth and potential.

Way Forward

Amazon India has been proactive in launching educational initiatives, such as its Machine Learning (ML) Summer School editions in June 2021, June 2022, and August 2023, aimed at equipping students with ML skills. Additionally, in August 2023, a partnership with the Directorate General of Training (DGT) and Amazon Web Services (AWS) India was announced to enhance students' cloud computing and AI skills. In September 2021, the Atal Innovation Mission (AIM), along with ISRO and CBSE, introduced the ATL Space Challenge 2021, offering a competition platform for school students. These efforts reflect a commitment to fostering skill development and innovation among India's youth.

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