The Human Resources & Development (HRD) Ministry has turned down the Commerce Ministry's proposal to allow foreign universities to set up campuses in the Special Economic Zones (SEZs), which will not have to follow domestic regulations such as non-repatriation of profits.
It has rejected the Commerce Ministry’s argument that since SEZs were deemed foreign territories, Indian regulations shouldn't apply to them.
"The HRD has counter-argued that legislations such as labour regulations and criminal laws were the same in the zones as in the rest of the country, and for education, too, it must be same," an official told
The Commerce Ministry’s proposal to the HRD for special dispensation for foreign universities in SEZs is in line with its larger proposal, discussed with other Ministries and Departments last year, on reforming the higher education system.
Proposals for de-reserving the sector from the ‘not-for-profit’ category and allowing repatriation of profits, however, met with opposition from many sectors, including the HRD Ministry itself. The proposal has not come up for active discussion in the past few months.
“The Commerce Ministry was of the view that if there was hesitation in bringing about changes in the education system for the country at large, a beginning could be made in the SEZs. But it seems that it has used its persuasion powers better,” the official said.
The UPA Government, too, had attempted to reform the sector by introducing the Foreign Educational Institutions (Entry and Operations) Bill, in Parliament in May 2010, which lapsed in 2014.
The main reason why reputed foreign universities are keeping away from India is the regulation that disallows them to repatriate profits. According to the rules, whatever profits are made need to be ploughed back.
A handful of foreign universities such as the University of Chicago, Harvard Business School and Deakin University have opened centres for research in India, probably in the hope that there could be changes in regulations soon.