Commentary: Understanding The Indian Student Exodus

When over a million Indian students venture abroad each year for higher education, it’s not just an individual pursuit of academic excellence — it’s a societal phenomenon reshaping global education markets. The trend is growing rapidly, with a 68% increase in Indian students studying abroad between 2016 and 2022.

In 2023 alone, over 750,000 students left India for foreign universities. Total spending by Indian outbound students in tuition and living expenses is expected to reach $70 billion by 2025 — a substantial outflow for a developing economy.

What drives this exodus? What does it mean for India? And how can the Indian education sector respond?

THE ALLURE OF FOREIGN SHORES

Indian universities often struggle to compete with global counterparts in terms of rankings, research output, and faculty quality. Only three Indian institutions feature in the top 200 of the QS World University Rankings, compared to 36 from the U.S. and 11 from the UK. Foreign universities offer up to the minute facilities, extensive research funding, and niche programs in fields like Artificial Intelligence and Climate Policy — areas where India’s offerings remain limited.

Access to interdisciplinary programs is another draw. A student interested in combining technology and ethics may find tailored programs at MIT or Stanford, while such opportunities in India are scarce.

Global exposure is also a compelling factor. For many students, studying abroad offers a chance to experience cultural diversity, live in a developed nation, and build an international network. The appeal of a cosmopolitan lifestyle is undeniable, with cities like London, Toronto, and Sydney ranking high for quality of life and student satisfaction.

Lastly, countries like Canada, Australia, and Germany offer clear pathways from student visas to permanent residency, making them particularly attractive. The U.S. remains a favourite for its expansive job market, especially in STEM fields, despite its complex visa policies. Over 40% of Indian students in the U.S. pursue advanced degrees in engineering and IT, drawn by lucrative job prospects.

THE COST OF OPPORTUNITY: CHALLENGES AT HOME

Simply put, India has an overcrowded and outdated education system.

India’s premier institutions, like the IITs, IIMs, and AIIMS, admit less than 2% of applicants, leaving millions of capable students without access to quality education. For those who do secure admission, outdated curricula and limited industry integration remain significant hurdles.

FINANCIAL CONSIDERATIONS

Although foreign education is expensive, many Indian students view it as a worthwhile investment. Scholarships, education loans, and perceived higher returns in the form of international salaries often outweigh the cost.

For example, a graduate from a top U.S. business school can expect starting salaries exceeding $120,000 annually, compared to a median of ₹15 lakhs ($18,000) in India.

THE IMPACT ON INDIA

India has long grappled with brain drain. A 2021 survey revealed that 80% of Indian students studying abroad do not intend to return immediately, contributing their expertise instead to foreign economies. Indian-origin professionals dominate Silicon Valley, with CEOs like Sundar Pichai and Satya Nadella shaping the tech world, and Indian doctors forming the backbone of the UK’s NHS.

However, there is a silver lining. Many Indian expatriates remit billions annually — $87 billion in 2021 alone — making India the world’s largest recipient of remittances. Alumni networks of prestigious global institutions also act as soft power assets, opening doors for international collaborations.

The annual outflow for tuition and living expenses represents a significant drain on India’s foreign exchange reserves. This expenditure could otherwise fuel domestic infrastructure development or higher education reform.

On a personal level, families are often left coping with separation and aging parents with minimal support. At a societal level, the narrative of success increasingly ties itself to international education, reinforcing the idea that Indian institutions cannot meet aspirational goals.

TAKEAWAYS FOR INDIAN EDUCATION SECTOR

1. Policy Reforms

India’s New Education Policy (NEP) 2020 attempts to address some of these challenges by emphasizing multidisciplinary education, research funding, and global partnerships. However, its impact has been limited so far. To compete globally, India must fast-track efforts to improve rankings, modernize curricula, and incentivize private investment in education.

2. Infrastructure and Curriculum Overhaul

Indian universities must prioritize state-of-the-art research facilities and technology integration. Curricula should shift from rote learning to problem-solving and innovation, aligning with global industry needs.

3. Focus on Employability

Bridging the gap between academia and industry is critical. Vocational training, entrepreneurship programs, and stronger industry-academia collaboration can enhance graduate employability, reducing the allure of foreign education.

4. International Collaborations

Encouraging foreign universities to set up campuses in India, as permitted under NEP 2020, could make world-class education accessible locally. Joint degree programs and exchange initiatives with global institutions can also enrich Indian students’ academic experience.

INDIAN STUDENTS SUCCEED DESPITE THE SYSTEM

Ironically, the resilience and adaptability of Indian students stem partly from the systemic flaws they escape. The grueling competition at home germinates a survival mindset, while a lack of resources sharpens their ability to innovate. However, this success highlights the untapped potential within India’s youth — a potential hindered, rather than harnessed, by the current education system.

To unlock this potential, India must draw lessons from countries like Finland and Singapore, which prioritize creativity, critical thinking, and teacher quality over exam-centric education.

A BUSINESS SCHOOL PERSPECTIVE

Business education offers a microcosm of this trend. India has over 4,000 business schools, yet students often prefer Harvard, INSEAD, or London Business School for their global reputation, case-based pedagogy, and superior placement records.

As Executive Director at a leading Indian business school, I see an urgent need to rethink how we approach management education. Incorporating global case studies, building entrepreneurial mindsets, and ensuring faculty have international exposure are essential steps.

India’s education sector stands at a crossroads. By investing in quality, accessibility, and global integration, we can transform the country from a talent exporter to a talent hub. Until then, the exodus will continue, draining not just money, but the very potential that could propel India to the forefront of the global knowledge economy.

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Radhika Shrivastava is a professor and executive director at Fortune Institute of International Business in New Delhi, India, an AACSB member school.