As it currently stands, India is Australia’s second biggest market for international students, trailing far behind first placed China.
As at August 2019, there were 240,000 Chinese nationals enrolled to study in Australia, almost double the 126,000 Indian nationals enrolled (see next chart).
The imbalance is even greater with respect to ‘exports’ from international students (comprising course fees and living costs paid).
In the 2018-19 financial year, Chinese students spent $12 billion in Australia, more than double the $5.5 billion spent by Indian students (see next chart).
With Chinese international student numbers approaching their peak, as reflected by falling visa applications (see next chart), commentators are increasingly pinning their hopes on India taking the mantle as Australia’s biggest international student market.
The latest example of this thinking came yesterday via The Australian:
India has 850 million people under the age of 35 who need to receive an education. The sheer growth rate of the country sees one million Indians turning 18 every month.
Despite the availability of some world-class educational institutions, such as our own university, there simply aren’t enough higher education places to satisfy demand.
This perhaps explains why Indians already constitute the second largest group of foreign students studying in Australia…
As the Varghese report says, if Australia can maintain its growth in international students and recapture its share of Indian students from its 2009–10 peak, then direct revenue from Australian education exports to India could exceed $12bn by 2035…
India is the largest opportunity in the world for Australian universities.
The reality is less rosy, with Indian international students facing a number of new headwinds, which should curb enrolment growth going forward.
First, amid growing concerns around student quality as well as reported scandals involving Indian students, the Department of Home Affairs recently graded Indian student visa applications as “high-risk”, thus requiring applicants to demonstrate higher English-language proficiency as well as greater capacity to support themselves financially once in Australia.
These changes are clearly designed to prevent lower quality students from entering Australia, as well as to stop Indians from taking up bogus courses as a backdoor to gaining working rights and potential permanent residency.
Second, the Morrison Government’s recent reduction in Australia’s non-humanitarian permanent migrant intake, from 190,000 to 160,000, has reduced the probability of gaining residency following completion of their studies, thus reducing the incentive to study in Australia.
Third, and directly related to the above, the United Kingdom announced recently that it would match Australia’s two-year post study work rights, thus making Australia a less attractive study destination (see next chart).
Finally, there are question marks over whether Indians are wealthy enough to drive a large increase in students studying in Australia. As noted by professor Salvatore Babones:
Australian universities are so eager to demonstrate international student diversity that they have even started offering scholarships that are specifically targeted at Indian students…
The fact that they must offer scholarships in order to attract more students from India and other “non-traditional markets across Asia” underscores the reality that the number of families in the region who can afford to pay full fees for an Australian university degree is not large enough to support Australian universities’ international student enrolment ambitions…
Even if a sufficient number of financially-capable Indian international students could be recruited to diversify Australian universities’ dependence on Chinese students, recruiting them would likely require Australian universities to reach deep down into the talent pool, reducing standards still further…
University entry and teaching standards have already been trashed enough without reaching further down the quality barrel.