India is taking giant leaps in digitalization, and it is not wrong to say that this digital revolution has been largely led by tier-2 and tier-3 cities. Be it the fast adoption of digital payment systems, the growing number of video and content-sharing platforms in vernacular languages, or increased start-up activity (nearly 50% of recognized start-ups are in tier-2 and 3 cities), the ‘lower-tier cities’ are driving socio-economic trends. This is a direct result of infrastructural improvement, digital penetration, and increased literacy rates.
Not just opportunities but aspirations in tier-2 and 3 cities are also rising. Candidates from these cities are now creating new foreign education trends as they flock to global destinations on a large scale.
Over 7.5 lakh Indian students opted for overseas education in 2022, 68% more than in 2021. India is only second to China when it comes to enrolling in international education programs. And this number is only projected to grow. By 2024 as many as 18 lakh Indians will be studying abroad (Redseer 2021). A large chunk of this population will come from tier-2 and tier-3 cities. '
As per Prodigy Finance, a UK-based student lending company, the number of loan applications from tier-2 and tier-3 cities in India increased by an average of 53% and 109%, respectively, in 2022. Vijayawada and Lucknow made significant contributions to this increase, with respective growth rates of 185% and 91%.
Confirming this trend, a recent survey conducted by upGrad Abroad to understand the aspirations of Indian youth found an overwhelming 80% of the respondents were from tier-2 and tier-3 cities who were exploring pathways to study abroad.
The Rise of Middle Class and Study Abroad Aspirations
With the rise of the Indian middle class, these cities that were long viewed as being slow-moving and backward are now the nation's new centers for education. We found from upGrad Abroad cohorts that 44% of learners flying offshore came from non-metro cities.
According to a report by the World Data Lab, India's middle-class population grew from 78 million in 2000 to 604 million in 2020. This growth has been fueled by rising incomes, increased job opportunities, and better living standards.
The expansion of education opportunities has also contributed to the growth of the middle class in India. As more people have access to quality education, they are better equipped to take advantage of job opportunities that require specialized skills and now aspire for global education and experiences.
This certainly is an encouraging trend for new models of learning, too, such as a hybrid model (part online and part on-campus) that aims to provide affordable foreign degrees to Indian students. In fact, hybrid learning is the most promising trend when it comes to shaping the future of higher education globally. Education providers in India are continually striving for innovative solutions to cater to this growing demand.
Additionally, Indian students are looking at non-traditional educational hubs in a major way, giving them more options to choose from. While the US, UK, and Canada still enjoy the top spots, Germany, Italy, the Netherlands, and the like are also emerging as strong contenders in attracting Indian students abroad.
According to the German Academic Exchange Service (DAAD) figure, at least 34,134 students from India enrolled in Germany in 2022, an increase of 18% from the previous year.
Booming GCCS will require a Skilled Workforce
India is currently a hotspot of commercial activity too. During the pandemic years, it became a lucrative country to set up Global Capability Centers (GCCs), which resulted in producing the biggest employment avenues for the country. GCCs are centers of excellence operating at top offshore locations worldwide and serving their parent enterprise. As per NASSCOM, over 500 GCCs are to be added to India’s existing tally of 1,500 GCCs by 2026. As per media reports, these GCC’s had more than 1.3 million employees, and over $35 billion in annual revenue as of 2022.
As of 2019, 95+% of GCCs were present in metros and the remaining in emerging tier-2 locations like Chandigarh, Jaipur, Vadodara, Ahmedabad, Visakhapatnam, Coimbatore, and Thiruvananthapuram. The new additions will most likely have a significant presence in tier-2 cities.
This boom will require a highly skilled workforce that the talent pool returning to India after studying and gaining experience abroad can provide. While students opting for studying abroad are looking at a wider pool of opportunities and migrating to developed economies, many will migrate back to pursue their careers and significantly improve the local talent pool. They will further propel the Indian economy and its global dominance.