challenges faced by niit

8/3/2019 Challenges Faced by Niit

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INDIA ATTRACTS GLOBAL SCHOOLSbyShivani VarmaWith the entry of the foreign education providers in India, Indian institutes may have to work hard to compete

successfully with the foreign establishments which are ready with huge outlays to set up their campuses in

India. A study of how the Indian education system has changed.INDIA has become a favoured business destination for companies across the world. Global brands are vying to grab

a larger pie of this market. Like any other sector, education too is an inviting domain for entrepreneurs. At the same

time, there are many Indian institutes trying to foray into foreign countries and achieve global scale.

According to the quarterly report of Technopak, (Volume 1, 2009), India has the largest student population worldwide

with about 1.85 lakh Indians studying abroad and spending $ 4 billion annually. However, during the immigration

process, they face various problems related to visa, safety and high living cost. Another section of the society is

eager to send their children for studies abroad but can not do so because of the high fee structure.

On the positive side, there are many foreign universities queuing up to make their presence felt in India. Even though

the demand is huge for such institutions in India, government apathy and red tape keeps them from entering theborders of India. The Union Government has yet to approve the Foreign Universities Bill which would let foreign

universities set up campuses in India, and award degrees.

FDI in education

Although since 2000, 100 per cent Foreign Direct Investment (FDI) is permitted in the education sector via the

automatic route, the legal structure of our country does not permit granting of degrees by foreign educational

institutions on Indian soil, said Kapil Sibal, the Union Minister for Human Resource Development in a press release.

India is in the process of introducing suitable legislative framework in regard to foreign education providers, which

would regulate the entry of foreign education providers as per our national priorities, he added. Currently, it is not

possible for non-profit companies under Article 25 of the Companies Registration Act like industry associations toset up an institution and get university status and recognition from the University Grants Commission (UGC). Foreign

institutes in India can be set up only by trusts, societies and charitable institutions, but the profits cannot be taken out

of the institution and have to be reinvested. According to a Technopak report, Currently, any university or deemed

institute has to seek All India Council for Technical Education's (AICTE) approval before getting into foreign

collaboration for technical education. The National Knowledge Commission (NKC) has also suggested the setting up

of an independent regulator for higher education, which would also have degree-granting powers.

Diverse business routes

According to recent media reports, out of 225 existing collaborations in education, 83 institutions are from Britain

while 79 are from the US. They are adopting the routes like franchisee, joint venture, licensee and link programmes.

Crestcom, Tumble Tots, FasTracKids, UCMAS, Helen O' Grady, Mad Science, the Linguaphone Group, Morpheus

Global University (South Asia University) and UEI Global are some of the institutions which are already present in

India through either of these routes.

According to a media report, Columbia University, Imperial College London, University of Glasgow, Keele University,

Harvard University, Yale University, Massachusetts Institutes of Technology, Boston University and University of

Surrey are keen to start their operation in India either through setting up their campuses or through twinning

arrangements with the universities in India.
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Franchising eulogized

Franchising is one of the best suitable routes for institutes to make their foreign entry. FasTracKids entered the Indian

market through the franchising route. Our existing centres act as a source of referrals hel ping us to achieve growth

of 88 per cent over the past two years, said Kevin Krause, Chairman, FasTracKids International. Mad Science has

also chosen this to be the best way forward to expand the outward reach of 'teaching science hands-on' to primary

school children the world over, said Anirban Chanda, Managing Director of Mad Science of Kolkata.

Some of the Indian entrepreneurs, who are running their centres outside India, also accept franchising as an

appropriate business model to expand across the globe. Right from the beginning, we have started foreign

operations through the franchising route. Apart from strong brand, strong know-how, strong product, high quality

content and curriculum, we also require significant amount of local know-how, knowledge of local territory, local rules

and regulations, consumer behavior as well as language. All these business traits could be brought by a local

franchisee, said Anuj Kacker, COO and Head of retail and international business, Aptech Ltd.

In every country the local partners share international education business division's vision of mass computer literacy

and quality computer education. The business model fosters entrepreneurial spirit and lets stakeholders enjoy the

fruits of their labour, said Ajay Lal, Senior Vice-President of International Education Business (IT), NIIT Ltd. The key

route adopted for international expansion was and continues to be franchising, he added.

And Lina Ashar, Chairperson of Kangaroo Kids Education averred, No other business concept can offer such an

attractive and beneficial arrangement. Franchising route allows us rapid growth feasible with minimum capital

expenditure with fair capital returns - a motivated localised management that is well aware of what works in their

market.

Licensing

On the other hand, the Linguaphone Group has spread its presence in India through master licensing. We have

licensed partners for two of our brands Linguaphone and Direct English. Lotus Learning is the master franchisee for

Linguaphone in India while the master franchisee for the second brand is taken by Rutledge Job Link, said Sarah

Cole, Head of Marketing, Linguaphone group. Linguaphone group has over 108 years of experience; the group hasan extensive network of 200 learning centres worldwide.

Little demand, higher returns

Like any other business, education business also faces various challenges. According to the Technopak report, in

terms of percentage, there is only 0.001 per cent of the total students' population, who are pursuing their courses in

any foreign country. This miniscule segment could become one of the important challenges which any foreign

institution could face in this country. This could also become a hurdle for them to meet the break even point.

On the positive side, this small segment of students are spending $ 4 billion annually, which is almost 10 per cent of

the private spending on education. This could benefit the Indian economy.

Diverse cultures, different challenges

Apart from this, education business is highly regulated in most of the countries. It also acts as a cultural barrier for the

international business. The product and the product presentation are needed to be localised. Initial challenges faced

by NIIT were the localisation of the product portfolio, regulatory structure at many countries and lack of market

information, said Lal.

We have to conform to the local rules and regulations which can vary with every country. Kacker said. Different

countries have different education systems. Countries like Middle East, Saudi Arabia and Dubai are strongly Islamic


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countries. Explaining this, Kacker said, In Saudi Arabia, a female student should be taught by only female faculty

and not by male faculty. In Russia, the course should be affiliated to their universities. Following their education

system, we affiliate our course content as part of their course curriculum itself.

Being a British company, we have to learn the Indian business operation. We have the master licensee for five

countries - India, Bangladesh, Sri Lanka, Philippines and Poland. Indian market for English language is different from

other countries. The target market is different, said Supriyo Chaudhuri, Director, Rutledge Recruitment and Training,

London, and the master licensee for Direct English in India. Elucidating this, he said, for example, in France, English

language is learned by those who want to do their business in England or America. In China, people do not speak

English; they learn English to get into the world. But, in India, it helps in getting better job. In India, most students look

for employment after completing their graduate degree, while in many of international markets, students want to enter

the job market right after school.

Novelties also run into hurdles

Other hurdles could also appear in the business way. If the product is novel to its kind in the market, then this could

also become an obstacle. This was the case with UCMAS. UCMAS is a Malaysian company providing Abacus mental

arithmetic programme for the age group of 7-12 years. Since the product was totally new in the Indian market, there

was lot of resistance initially. Innumerable presentations, practical demonstrations and referrals made us to overcome

the resistance. The assured results and total satisfaction of parents actually made us to overcome the problems,

said AV Sekhar, GM, Franchise Operations, UCMAS India.

The way out

Despite various companies facing diverse challenges in different countries, their poise and confidence help them

bring about success in their business. We addressed not just the issue of language but also the cultural aspects in

our localisation efforts. Today, our vast product portfolio can address many of our learners demands. This portfolio is

upgraded regularly to reflect the changing requirements of the industry

challenges faced by niit

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