Here's why those opposing entry of foreign universities in India are wrong

The idea of importing foreign universities is the same as importing anything else. It is meant to improve supply

Some people are very annoyed with the University Grants Commission's (UGC) proposal to allow foreign universities into India on what appear to them as very advantageous terms.

These people are dead wrong because when you come down to it, universities sell something people want badly, namely, education. Students buy this with their parents' money, bank loans, or both.

That's the nature of the game, and it depends for success on a single requirement: monopolistic competition because then some suppliers can say they are better than others.

In this kind of competition, there are only a few sellers. This market structure is created by (a) exclusion and, therefore, (b) branding.

The exclusion is achieved by a single criterion: marks. The branding is achieved by deliberately confusing the original exclusion with permanent intellectual superiority. But the evidence to prove that the original entry requirement has led to millions of geniuses is wafer thin.

Nevertheless, if you have obtained a degree from certain universities and never mind your graduation marks, you are automatically assumed to be intellectually superior to those who haven't.

This is actually no different from assuming that people who buy only expensive things are wealthier than those who don't. Thus, if I wear cheap T-shirts that cost Rs 500 and very expensive sandals because I have flat feet, am I wealthy or not wealthy?

So just as you can't make assumptions from purchases, you can't assume that entry criteria indicate superior intellect. They may or may not. And this is true of the faculty as well. Good teaching is not a function of the rank of the university or college. But good branding is.

Likewise, for research. The environment does have an impact, but it is marginal. Top-class research can come from low-ranked universities because brands drive the ranking methodology.

So going back to the idea of importing universities, it is the same as importing anything else. It's meant to increase supply, that's all. Remember, we imported many schools during British rule because we didn't have enough to offer education in English.

A more substantial question is why we should try a failed model. It seems that franchised universities don't work because the locals can't afford the fees.

My answer is simple: as long as the Indian taxpayer is not funding the imported universities, why should we care? It's entirely the lookout for foreign universities, just like other industries.

If the Indian private sector can set up universities and/or collaborate with foreign ones, why not import a foreign one?

Here let me quote Kaushik Basu, who is no admirer of this government. The following paras are from his dissent note on UGC reform in 2009.

"We should allow private sector money to come into higher education…They should be allowed to set college fees as high as they choose, as long as this is made transparent." He hasn't explicitly mentioned foreign money, though.

He goes on to say, "Given our historic (though eroding) advantage in higher education, our strength in the English language and our low cost of living, it is possible for India to position itself as a major destination for students from around the world, not just from poor countries, but rich, industrialised nations…."

"If India can build some good universities with high-quality residences for students and advertise that globally, it can give this market tough competition. If India charges tuition fees of Rs 5 lakhs per annum from foreign students, then with all other overheads a student can get quality education for Rs 8 lakhs per annum, which is one-third the cost in the US."