Indians spend ₹1.76 lakh crore on overseas education

Post by : Jyoti Singh

Photo: Reuters

Over the last ten years, Indians have spent an astonishing amount of money on education abroad, sending nearly ₹1.76 lakh crore to other countries to fund the studies of Indian students. This figure, revealed by new data from the Reserve Bank of India (RBI), shows just how rapidly the trend of studying overseas has grown among Indian families.

To put the number in perspective, experts say that this huge sum could have been enough to build over 60 new Indian Institutes of Technology (IITs)- some of the most prestigious engineering institutions in the country.

The Rapid Rise in Overseas Education Spending

Just a decade ago, the amount of money sent abroad for education purposes was much smaller. In the 2013–14 financial year, Indian students and their families remitted ₹2,429 crore to pay for tuition fees, living expenses, and other costs related to overseas studies.

Fast forward ten years, and the number has ballooned almost twelve times. In 2023–24, the outflow for overseas education reached ₹29,000 crore. This is nearly the same as the amount spent in the previous year (2022–23), showing that the high demand for foreign education remains steady.

In percentage terms, the growth over the past decade stands at around 1,200%—a figure that reflects both the rising aspirations of Indian students and the increasing costs of education abroad.

Why Are So Many Indians Studying Abroad?

Several factors have contributed to this massive increase:

1. Better Career Opportunities

Many students believe that earning a degree from a reputed foreign university will give them an edge in the global job market. International degrees are often seen as gateways to higher salaries and better career growth.

2. Wider Range of Courses

Some specialised courses and advanced research facilities are more easily available in countries such as the USA, UK, Canada, and Australia compared to India.

3. Global Exposure

Studying abroad gives students a chance to experience different cultures, interact with people from around the world, and build international networks.

4. Immigration Opportunities

In some countries, foreign graduates are offered work permits and paths to permanent residency, making overseas education even more attractive for those who wish to settle abroad.

5. Increased Access to Loans

Education loans and financial assistance programs in India have made it easier for students from middle-class families to afford foreign studies.

Countries That Receive the Most Indian Students

While the RBI data does not list the destination countries, previous studies and immigration statistics show that most Indian students head to:

• United States – Known for its top universities and research facilities.

• Canada– Popular for post-study work options and immigrant-friendly policies.

• United Kingdom – Famous for its historic universities and shorter course durations.

• Australia – Offers quality education and a welcoming environment for students.

European countries like Germany, France, and the Netherlands – Attract students with lower tuition fees and high-quality education in English.

The Financial Impact on India

Sending such a huge sum of money abroad has both social and economic effects on India.

Foreign Exchange Outflow

The ₹1.76 lakh crore remitted for education represents a large outflow of foreign exchange, which could otherwise have been invested in Indian institutions and infrastructure.

Brain Drain

Many students who go abroad for studies choose to settle there permanently, leading to a loss of talent for India.

Pressure on Middle-Class Families

The rising cost of foreign education often puts heavy financial pressure on families, many of whom take large loans to support their children’s studies.

Boost to Overseas Economies

While India loses money, the countries hosting Indian students benefit from tuition fees, rent, and living expenses spent by these students.

Could This Money Have Been Used in India?

The RBI’s comparison with the cost of building IITs is striking. Setting up one IIT costs roughly ₹2,800 crore. If the ₹1.76 lakh crore sent abroad over the past decade had been invested in building higher education infrastructure in India, more than 60 IITs could have been established.

This could have:

Provided thousands of additional seats in top-quality institutions.

• Reduced the need for students to go abroad.

• Kept more money circulating in India’s economy.

However, experts note that simply building more IITs is not enough—there is also a need to improve faculty quality, research facilities, and international collaborations to match global standards.

The Steady Climb Year-by-Year

While the exact yearly figures for all ten years are not listed in the RBI report, trends from other sources indicate a continuous rise, with only a brief slowdown during 2020–21 when the COVID-19 pandemic disrupted travel and admissions. Once restrictions eased, the numbers quickly bounced back to record highs.

Education Costs Abroad Keep Rising

The cost of studying abroad has been rising faster than inflation in India. Tuition fees at many foreign universities increase every year, and living expenses—especially in cities like London, New York, Sydney, and Toronto—have also climbed sharply.

For example:

A master’s degree in the USA can cost between ₹30 lakh and ₹50 lakh excluding living expenses.

In the UK, annual tuition for international students can range from ₹15 lakh to ₹30 lakh with living costs adding another ₹10 lakh to ₹15 lakh per year.

These high costs mean that even students from wealthy families feel the financial strain, while middle-class families often rely on large loans that can take years to repay.

Government and RBI View

The RBI’s data release does not comment on whether this trend is good or bad, but it serves as a reminder of the scale of spending on overseas education. Some policymakers worry that the huge outflow of funds could hurt India’s foreign exchange reserves if it keeps rising.

There have been calls for:

Expanding quality education in India so that fewer students feel the need to go abroad.

Strengthening research and innovation to match global standards.

Encouraging foreign universities to set up campuses in India which could keep more money in the country while still offering students an international education.

Students’ Perspective

Despite the high costs, many students and parents see overseas education as an investment in the future. For them, the potential for better job prospects, higher salaries, and global exposure outweighs the financial burden.

Some students also point out that competition for seats in India’s top institutions is extremely tough. With millions competing for a few thousand seats in medical, engineering, and management courses, studying abroad often becomes the more realistic option.

The Road Ahead

The trend of Indians going abroad for education shows no signs of slowing down. Unless there is a major improvement in the quality, availability, and global recognition of Indian higher education, families are likely to keep sending their children overseas.

At the same time, the rising number of Indian students abroad presents opportunities for the Indian government and private sector to:

Build stronger alumni networks.

• Encourage overseas graduates to return and work in India.

• Develop international partnerships in research, business, and technology.

The RBI’s data on the ₹1.76 lakh crore spent in the past decade paints a clear picture—India’s young generation is looking beyond its borders for higher education, and families are willing to make huge financial sacrifices to make it happen.

Whether this is a long-term benefit or a loss for the country will depend on how India manages to upgrade its educational system and create attractive opportunities for its brightest minds at home.

RBI education remittance data