By Kapil Sibal
Money flows only in the hope of making a profit. This is true of all forms of investment and in particular, foreign investment. Whether it is Foreign Direct Investment (FDI) or Foreign Institutional Investment (FII), the aim of any such enterprise is to make a profit.
The architecture of the World Trade Organization (WTO) for reduction or elimination of tariff barriers was to allow for export markets to be opened up for the developed world. The developed world has always had an upper hand when negotiating Foreign Trade Agreements (FTAs).
So, we should disabuse ourselves of the belief that the intent behind foreign investments in India is public good. They are here to make profit and the Government of India has opened its doors for such enterprises.
It has been recently reported that two Australian universities are ready to set up campuses in India replicating their institutions at home. This, according to the government, serves the purpose of ensuring that our students do not have to travel to Australia for higher studies. In reality, this is for those who already have the financial muscle to send their children abroad.
The policy framework for such investments, as has been articulated by this government, will allow such foreign campuses to regulate their own fees, work for profit and be entitled to repatriate surpluses, something that the Bharatiya Janata Party (BJP) had strongly opposed when I, as the then Minister for Human Resource Development, had mooted the idea of building an architecture for foreign investment in education.
While it is true that such a campus, when functional, will benefit Indian students, the fact is that the policy of the government with respect to reservation and affirmative action may not be applicable in admissions to such campuses.
Such campuses will tend to serve the interests of those students who can afford to take admission. Besides, the course curriculum will no longer cater to the needs of the Indian economy but will be oriented towards the requirements of the developed world.
Though one is happy to know that two of the allegedly top-ranked universities in the world are willing to explore the possibility of setting up campuses in India, I have my doubts whether other such universities like Harvard, Yale, Stanford, etc., will also be looking for such opportunities in India. Of the foreign higher educational institutions (FHEIs) in over 37 countries, 42 of over 300 campuses are in China, 33 in UAE, 16 in Singapore, 15 in Malaysia and 11 in Qatar. Of the 42 universities in China, the only known university of some global standing is NYU Shanghai, which has set up a campus. The other universities like Berkeley, Michigan, etc., owe their presence to joint centres or collaboration with Chinese universities. Not a single FHEI ranked above 100 is present in Malaysia.
To build a top-class university, what is needed is an amalgamation of research and high-quality teaching. The government’s track record of research grants to universities at home has been relatively poor