Driven by a large youth population, rising aspirations, policy reforms, and globalisation of education, the sector is estimated to require around USD 100 billion in construction-led investment over the next decade—excluding land acquisition and student housing.

Demographics and Policy Driving Unprecedented Demand

India’s higher-education enrolments have grown sharply over the past decade, rising from 27 million students in 2010–11 to 45 million in 2022–23. This growth is underpinned by a rapidly expanding higher-secondary pipeline and rising household willingness to invest in education.

The National Education Policy (NEP) 2020 has further accelerated this momentum by setting an ambitious target of 50% Gross Enrolment Ratio (GER) by 2035, up from current levels. Achieving this target will require the creation of approximately 25 million additional student seats, translating into one of the largest academic infrastructure build-outs ever attempted.

Shobhit Agarwal, CEO of ANAROCK Capital, said that meeting this demand would require nearly USD 100 billion in investment for academic facilities alone, adding that recent policy signals, including provisions in the Union Budget 2026 to support five university townships, indicate growing recognition of the infrastructure gap.

Infrastructure Expansion Lagging Behind Demand

While India has expanded its institutional base, supply continues to trail demand. The number of universities has increased from 760 in 2015 to 1,338 in 2025, and total Higher Education Institutions (HEIs) have grown from 51,534 to 70,018 during the same period.

However, ANAROCK Capital notes that current infrastructure capacity remains insufficient to meet both demographic momentum and policy ambitions, especially given the scale of incremental demand expected over the next decade.

The report highlights that higher-secondary education participation has expanded sharply, with overall GER increasing from 19.5% in 2010–11 to 62.3% in 2021–22. Growth has been particularly strong among girls, whose GER has risen 3.3 times over two decades, significantly outpacing male participation growth.

Foreign Universities Enter India’s Education Market

A major inflection point for the sector came with the Foreign Higher Educational Institutions (FHEI) Regulations, 2023, which allow top-ranked global universities to establish independent campuses in India with academic autonomy and UGC oversight.

Aashiesh Agarwaal, SVP – Investment Advisory at ANAROCK Capital, said that foreign universities ranked within the global top 500 can now set up campuses without affiliating with Indian universities, provided they demonstrate financial strength and build requisite physical infrastructure.

So far, three foreign universities—including institutions from the UK and Australia—have commenced operations in India, while thirteen more have announced upcoming campuses, reflecting rising international confidence in India’s education ecosystem.

States Compete to Attract Global Campuses

Several state governments have rolled out targeted policies to attract higher-education investment:

• Uttar Pradesh has announced stamp duty exemptions and capital subsidies
• GIFT City, Gujarat, has developed a dedicated international campus framework with shared academic infrastructure
• Maharashtra is developing a 250-acre ‘Educity’ near Navi Mumbai International Airport, with commitments already secured from five foreign universities

These initiatives are expected to catalyse both academic and real estate development across regions.

Asset-Light Models and Real Estate Opportunity

ANAROCK Capital notes that many new entrants—especially private and foreign universities—may initially adopt asset-light strategies, leasing space in existing or purpose-built institutional buildings before investing in owned campuses.

While this reduces upfront capital expenditure for universities, it shifts investment demand to developers, REITs, and long-term landlords, who will be required to finance and deliver compliant academic infrastructure at scale.

Why This Matters for Investors and Developers

The report identifies a rare convergence of favourable conditions:

• Sustained demand driven by demographics and aspirations
• Structural undersupply of quality academic infrastructure
• Large outbound student flows creating a substitution opportunity
• Underpenetrated inbound student market
• Entry of global universities signalling long-term confidence
• Policy reforms creating institution-friendly investment pathways

Over the next decade, how India addresses its academic infrastructure gap will shape not only its education outcomes but also one of the largest institutional real estate markets in the world.

Also Read: Future Trends in Student Housing

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