UGC allows foreign university campuses in India to offer offline courses, repatriate profits

Foreign universities will require UGC’s approval to set up campus but cross-border movement of funds will be according to the FEMA 1999.


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UGC will penalise the foreign university campuses in India if they offer courses that "jeopardies" national interest of India (Representational Photo: Shutterstock)UGC will penalise the foreign university campuses in India if they offer courses that "jeopardies" national interest of India (Representational Photo: Shutterstock)

R. Radhika | January 5, 2023 | 02:17 PM IST

NEW DELHI: With an aim to internationalise higher education, University Grants Commission has drafted detailed guidelines for foreign universities to set up campuses in India.

The draft UGC (Setting up and Operation of Campuses of Foreign Higher Educational Institutions in India) Regulations, 2023 allow universities abroad that are in the top 500 in global rankings to set up campuses across India. The draft regulations also cover other eminent universities that do not participate in global rankings.

“There are universities that may not participate in global rankings but they are reputed such as the institutions that are part of Max Planck Society which has 84 institutions and they offer PhD programmes. All these institutions that participate in global rankings and others of repute will be considered under these regulations,” said Jagadesh Kumar, chairman, UGC.

All foreign higher educational institutions will have to go through an online application and further assessment process conducted by the UGC. While the UGC will play the role of an approving body with some penalising powers, the foreign university campuses will be largely governed under the Foreign Exchange Management Act (FEMA) 1999. The new regulations permit the foreign universities to fully repatriate the profits earned to their parent institution in their home country “without any restrictions”. So far, shifting of funds out of India has not been allowed.

Earlier, in October 2022, the International Financial Services Centres Authority (IFSCA) – a central regulator for financial products, services and institutions– framed a set of regulations for educational campuses in Gujarat International Finance Tec-City (GIFT City). These guidelines also allow foreign institutions to repatriate profits without restrictions.

Stakeholders will be able to send their suggestions and comments to the draft, made public on Thursday, till the end of January.

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Approval and penalty

According to UGC’s eligibility criteria, the foreign institutions have to feature in the top 500 either in overall or subject-wise global rankings.

Interested foreign universities will be required to apply on UGC’s online portal with a non-refundable processing fee to set up an Indian campus. The application will be assessed by a standing committee that will check the credibility of the institution within 45 days of the day the application is filed.

If approval is granted, the UGC will allow the foreign institution two years to establish its physical campus and infrastructure necessary to start academic operations. Once the infrastructure is in place, UGC will conduct an inspection to check the campus readiness to start academic operations within 45 days.

As per the draft regulations, the initial approval will last for 10 years and in the ninth year, foreign institutions will be allowed to file for an extension for the next 10 years. UGC can also conduct inspections at any time to check the facilities and academic operations of the institution. The UGC, according to Kumar, has the powers to withdraw approval or penalise the institution in case of violations of norms. The extent of this penalty, however, is unclear. From second year onwards, the UGC will also charge an annual fee from the foreign university. Kumar also said reputable institutions from Europe have shown interest in setting up campuses in India.

Further, without UGC’s approval, the foreign institutions cannot discontinue courses. In case of discontinuation, the parent institution will be responsible for providing an alternative to students.

At par with autonomous institutions in India

The new regulations allow foreign universities to evolve their own admission policies, decide the courses and the fee structure of the courses offered. The UGC, according to Kumar, will have no role to play in deciding these aspects of the institution.

“The UGC regulations permit the foreign institutions to draft their own admission process. They will be allowed to admit both Indian and foreign students. The foreign universities can also decide their own fee structure but this has to be a transparent process. The universities will be required to charge a reasonable fee that must be announced on their websites prior to the admission,” said Kumar.

Kumar further said that the foreign universities will also be encouraged to offer full or partial “need-based scholarships” from their endowment funds, alumni funds, tuition revenues, or any other resources to students who belong to the economically disadvantaged section of the society.

Foreign universities in India will have the freedom to appoint foreign or domestic faculty as per the recruitment norms of the parent institutions. Institutions are also free to decide the salary structure, qualifications and other requirements for appointment of staff and teachers. The UGC has put a condition that foreign teachers cannot be visiting faculty; instead they must reside on campus for at least a semester or two.

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Conditions: Foreign university campus in India

As per the UGC, the institution must ensure that the quality of courses offered in India is at par with those offered in the parent institution. Online courses or distance learning mode of learning will not be an option for the foreign institutions.

Qualifications or the degree offered to the students India by the foreign universities has to be recognised at the parent institution. The campus should arrange for physical infrastructure and funds to operate.

While there are no restrictions on programmes offered by foreign universities, the UGC has made one exception to this clause. “The foreign institutions cannot offer any such programmes of study that jeopardises the national interest of India and the quality of higher education in India. We are quite conscious of the education that should be offered in these campuses,” said Kumar.

Apart from that the foreign universities will require an audit and annual report to be submitted to the commission.

Routes to establish campus

Under FEMA 1999, the foreign universities will be allowed to establish campuses through various routes. For instance, the Indian campus can be established under Companies Act 2013 or limited liabilities partnership act or collaborate with existing Indian entities. In India, educational institutions are mandatorily established by a trust or society or a section 8 company.

Since, the institutions are allowed to set up campus anywhere in India, all domestic and national law mandatorily applicable on Indian higher education institutions will be applicable to these institutions as well.

Draft further states that the “cross border movement of funds and maintenance of foreign accounts, mode of payments, remittance, repatriation and sale of proceeds shall be as per the FEMA 1999.” This has been an area of debate but now it has been made clear through this regulation that foreign institutions can repatriate the funds generated by the campus,” said Kumar.

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