Universities should adjust to Indian needs as Chinese tide recedes

Growth in Chinese students is likely to slow and universities need to adapt fast to capture the growing Indian market.

A view of central Mumbai. A report says Indian students are keen to study in Australia, provided some universities adjust to their needs.

Growth in Chinese students is likely to slow and Australian universities need to innovate and adapt fast to capture more of the growing international market for Indian students, says a new report from consultancy group LEK.

The report, titled The Elephant at the Door, says that several factors including changing demographics, the advance of many Chinese universities to the global top tier and a growing diversity of English-language learning options mean that the high growth in demand from Chinese students is likely to moderate.

This is aside from the possibility of growing political tension which could lead to some Chinese students turning away from Australia, or official policies that might restrict student flow to Australia.

“The current high 15 per cent annual growth in the numbers of Chinese students coming to Australia could fall to 5-10 per cent,” said one of the report’s authors, LEK. partner Anip Sharma.

The report says that the size of the university-aged population in China is expected to fall from about 117 million in 2018 to 106 million in 2025. On top of this is the fact that the Chinese have foreign university education options available at home, with 37 foreign branch campuses in the country and more than 2000 joint ventures between Chinese and foreign universities.

In contrast, India’s university-aged population is growing and the country has not yet managed to lift its own universities into the world’s top tier. Furthermore, ­Indian employers rank foreign-trained graduates highly.

“With these structural trends in place, it is likely that Indian student numbers in Australia will grow strongly, at 10-15 per cent over the next seven to 10 years, which would be either in line with, or almost twice the anticipated growth rate of Chinese students,” the report says.

While LEK. believes that Chinese students are likely to remain the dominant national group among international students in Australian universities, it sees a big opportunity for institutions which can adapt to attract more Indian students.

It requires innovation in universities’ product offering and deeper penetration of the Indian market, Mr Sharma said. He suggested launching applied masters degree programs, which are more rooted in applied knowledge and geared towards employability.

He said universities could look at hybrid options with part of the course in India with an Indian partner institution, and part of it in Australia. Mr Sharma also said universities needed to bear in mind that India was a more cost-sensitive market than China, demonstrated by the fact that Indian students are currently concentrated in the lower-cost tier of Australian universities, not the prestigious Group of Eight.

“Our fundamental point is that what has worked for Chinese students is not going to work for Indian students, there has to be a shift,” Mr Sharma said.

The report says that Australia’s “second-tier” universities are probably best placed to reshape their course offerings to suit Indian students.

“These institutions are highly ambitious and innovation-­focused, without having premium brand positioning to protect,” it states.