Stricter Visa Norms Abroad to Benefit Indian Higher Education Sector: ICRA
Introduction
Amid tightening visa regulations in the USA, UK, and Canada—three of the top destinations for Indian students seeking international education—rating agency ICRA predicts a significant growth opportunity for India’s domestic higher education sector. In its latest assessment, ICRA has highlighted how policy shifts abroad and proactive developments at home are reshaping the prospects of Indian universities and colleges.Tighter Visa Policies Abroad Could Redirect Student Flow
ICRA’s analysis suggests that recent and upcoming restrictions on student visas in Western countries are likely to divert a portion of the aspirant pool back to Indian institutions. Specifically, students targeting medical and other professional courses—many of whom previously planned to study overseas—are increasingly expected to consider domestic alternatives.
Suprio Banerjee, Vice President & Co-Group Head, Corporate Ratings at ICRA, emphasized that these visa restrictions could act as a catalyst for Indian higher education institutions, especially given their growing capacity and improving quality standards.
Strong Financial and Operational Performance of Indian Institutes
Between FY2020 and FY2024, private and government-backed higher education institutions—particularly in the medical and technical streams—have posted a robust compounded annual growth rate (CAGR) of 15% in revenues. This performance is attributed to:-
Healthy admission numbers
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Annual fee hikes of 6–8%
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Expanding course offerings
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Increased seat capacity
ICRA projects a revenue expansion of 9–11% in FY2026, mirroring growth expected in FY2025.
Improved Government Support and Infrastructure Expansion
The Indian government has doubled its expenditure on higher education over the last decade. This investment has supported the rise in the number of recognized universities from 642 in AY2011 to 1,189 in AY2025.
Additionally, the National Education Policy (NEP) 2020 continues to serve as a significant push factor in improving enrolment and raising quality benchmarks in the sector. The policy aims to increase the Gross Enrolment Ratio (GER) in higher education to 50% by 2035, up from 28% in AY2022.
Financial Resilience Amid Expansion
Despite frequent capital expenditure requirements for expanding institutional capacity, Indian higher education providers have maintained a healthy operating surplus of 30–35% between FY2020–FY2024. ICRA expects this trend to continue in FY2025 and FY2026. This stability is supported by:-
High liquidity buffers
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Controlled debt levels
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Sound surplus generation
This has allowed institutions to fund capital investments through internal accruals rather than over-leveraging, preserving their credit strength.
Demographic Tailwinds and Access to Credit
India’s youth demographic continues to serve as a key growth driver. With an estimated 15–20% of the population aged 15–24, demand for higher education is expected to remain robust over the next decade.While the rising cost of education has been a deterrent for some, increased access to education loans through public and private financial institutions is helping to bridge affordability gaps.
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