GIFT City: Wooing foreign universities to India
IN ASIA, not least India, one of the key aspirational goals for many families is Western higher education. Universities in the United States, United Kingdom, Canada, Australia, Singapore and other jurisdictions in Europe, have long been favourites. However, the Covid pandemic, and now the war in Ukraine, has impacted as well the plans of students enrolled in or aspiring to foreign universities. We have all read about foreign students who had to be rescued from eastern Ukraine in the early days of the conflict.
Taking a leaf from these global shifts, new Indian regulations were published in October that will allow certain foreign universities and educational institutions to open a branch in Gujarat International Financial Tec-City (Gift City) in Gandhinagar, Gujarat, without being subject to certain domestic mandates. The regulations also aim to promote research in banking, insurance, capital markets, funds management and fintech to train up people in these fields.
At present, foreign universities are not permitted to set up a campus on the Indian mainland. They have generally been operating under various other structures such as IP licensing, credit transfers, collaborations and twinning arrangements. Earlier attempts to allow their presence in India have run into hurdles over reciprocity and regulatory concerns. With Gift City, a door has finally been opened.
Gift City is India’s first greenfield smart city, containing a domestic tariff zone and an International Financial Services Centre (IFSC) in a multi-service special economic zone. The stated aim is to create a best-in-class global financial services centre and IT hub within an offshore framework. Both Indian and foreign participants can tap this framework for various financial services and IT-related transactions and financings. The scope of activities will continue to grow, with education being the latest addition. The International Financial Services Centres Authority (IFSCA) was established as a separate body to handle all affairs of the units operating in Gift City. Having a single regulator will make a world of a difference to foreign universities and institutions that would otherwise have a regulatory maze to deal with.
Foreign universities in the top 500 in global overall rankings and/or subject ranking in the latest QS World Universities league or reputed foreign educational institutions may set up in Gift City. Non-degree and diploma-granting institutions would also be eligible to come in. Hence there could potentially be institutions in the fields of skill development, executive education and vocational education, for instance.
While the regulations call for suitable infrastructure and facilities to be in put in place, enough flexibility has been allowed. For example, there is no minimum square footage requirement. This is welcome since many of the branches would most likely be in vertical campuses, as part of the commercial developments in Gift.
The flexibility doesn’t end there. Since these universities and institutions will be set up in Gift City’s offshore zone, all their transactions will be undertaken in freely convertible foreign currency. Critically, repatriation of profits without any restrictions is also permitted. This had been a hotly debated issue when India was considering allowing foreign universities to set up campuses in India. Firstly, a university on the Indian mainland has to be set up as a not-for-profit, and secondly, India, like China, still imposes exchange controls, and the rupee is not fully convertible on the capital account.
The regulations have also provided for safeguarding the students’ interests. Any course or programme conducted in Gift City has to be identical to the programme conducted in the home jurisdiction. All degrees, diplomas and certificates issued to the students will have to be recognised in the home jurisdictions. In the event of any disruption or discontinuation of a course or programme, the institution will be liable to provide an alternative to the affected students, including relocation to a jurisdiction where the same course is being provided. This emphasis on quality and assurance is important to ensure that only the best institutions are drawn to Gift City.
For universities and education institutions based in Singapore, this is clearly an opportunity to expand into the Indian market, with the added benefit of an offshore structure. Singapore is a leading education hub in the region and can be a perfect springboard to Gift City. There is already strong collaboration between the financial services sectors of both countries; the collaboration can now extend to higher education and help create a Gift City-Singapore education corridor. Cooperation and tie-ups can also extend to multiple areas identified by the IFSCA, including research and innovation. A deeper collaboration between both countries in the fields of higher education and skill development is mutually beneficial and would be a ray of hope in these uncertain times.
The writers are from Cyril Amarchand Mangaldas Singapore. Vivek Kathpalia is managing director, and Shambhawi Mishra, senior associate.
