The HRD ministry has sent proposals to the Department of Industrial Policy and Promotion and the Department of Economic Affairs to permit foreign universities to open their campuses in the country as companies as provided under the Companies Act.

As per the powers vested with the Central government to make rules under the UGC Act, the ministry is in the process of finalising the UGC (Established and Operation of Campuses of Foreign Educational Institutions) Rules by which foreign universities can set up campus in India and issue foreign degrees. The ministry had sought comments and observations of the Department of Industrial Policy and Promotion (DIPP) and the Department of Economic Affairs (DEA) on the Rules. Both DIPP and DEA have supported the proposal.

Under the proposed Rules, Foreign Educational Institutions (FEIs) can set up campuses in India once the FEIs have been notified as Foreign Education Providers (FEPs) by the UGC. FEIs have to fulfill certain eligibility conditions. Any FEI which intends to set up a campus in India would do so through an association to be registered as a company under s. 25 of the Companies Act, 1956. The FEI shall be ranked among the top 400 universities of the world as per the ranking published by Times Higher Education, Quacquarelli Symonds (QS) or the Academic Ranking of World Universities (ARWU) by Shanghai Jiao Tong University.

All FEIs intending to apply under the Rules shall be not-for-profit legal entities, which have been in existence for at least 20 years and accredited by an accrediting agency of that country or in the absence of its accreditation in that country, by an internationally accepted system of accreditation. The FEP will offer programmes of study or courses to be of quality comparable to those offered to students in its main campus.

Each FEI before being notified as an FEP would be required to maintain a corpus of not less than Rs.25 crore. The Rules also provide for penalties ranging from Rs.50 lakh-1 crore for FEPs who contravene any provision of these Rules or UGC Act, and the forfeit of corpus fund. The degrees awarded by these FEPs would be treated as foreign degrees only and the same shall be subject to the equivalence accorded by the Association of Indian Universities (AIU) as per their system.