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Indian Higher Education Sector : Trade Barriers in Education
There are some barriers that are applicable to all sectors, while other impediments are specific to the education services sector.
services sector. The trade barriers have been extensively covered in a consultation paper on “Higher education
in India and GATS: An Opportunity”
policy division, Department of commerce, Government of India.
The barriers with general application are:
The majority of generic barriers are from an exporter country’s point of view and focus on the supply
modes “cross border supply” and “commercial presence.”
There is a certain lack of transparency of government regulatory, policy and funding frameworks.
Domestic laws and regulations are administered in an unfair manner.
Subsidies are not made known in a clear and transparent manner.
Tax treatment which discriminates against foreign suppliers.
Foreign partners are treated less favourably than other providers.
GATS defines services trade as occurring via four modes of supply all of which are relevant to education:
Mode 1: Cross Border Delivery: Delivery of education services via internet (distance education, teleeducation,
education testing services).
Mode 2: Consumption Abroad: Movement of students from one country to another for higher
education (foreign students in US universities)
Mode 3: Commercial Presence: Establishment of local branch campuses or subsidiaries by foreign
universities in other countries, course offerings by domestic private colleges leading to degrees at
foreign universities, twinning arrangements, franchising.
Mode 4: Movement of Natural Persons: Temporary movement of teachers, lecturers, and education
personnel to provide education services overseas.
The principal barriers to trade in higher education services as regards cross-border supply (mode 1: e.g.
distance delivery or e-education;
Inappropriate restrictions on electronic transmission of course materials.
Economic needs test on suppliers of the services in question.
Lack of opportunity to qualify as degree granting institution.
Requirement to use local partners, with at the same time a barrier against entering into and exiting from
joint ventures with local or non-local partners on a voluntary basis.
Excessive fees/taxes imposed on licensing or royalty payments.
Restrictions on use/ import of educational materials.
The principal barriers to consumption abroad (mode 2, e.g.: students studying in another country) are:
Measures that restrict the entry and temporary stay of students, such as visa requirements and costs,
foreign currency and exchange controls.
Recognition of prior qualifications from other countries.
Quotas on numbers of international students in total and at a particular institution.
Restrictions on employment while studying.
Recognition of new qualification by other countries.
For trade via commercial presence (mode 3: branch or satellite campus; franchises; twinning arrangements)
common barriers include:
The inability to gain the required licences to grant a qualification.
Subsidies provided solely to local institutions.
Restrictions on recruitment of foreign teachers.
Difficulty in obtaining authorization to establish facilities.
Prohibition of higher education, adult education and training services offered by foreign entities.
Barriers to mode 4, i.e. presence of natural persons (e.g. teachers travelling to foreign country to teach) are:
Measures that restrict the entry and temporary stay and work for the service suppliers, such as
immigration barriers, nationality or residence requirements, quotas on number of temporary staff,
Economic needs test.
Recognition of credentials.
Minimum requirements for local hiring being disproportionately high.
Repatriation of earnings is subject to excessively costly fees or taxes for currency conversion.
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The Shruth & Smith Foundation is an independent, nonprofit, nongovernmental organization committed to work towards resolving enduring problems in social, educational and rural sectors that requires sustained effort and determination.