Why would Indian educational institutions want to go abroad?

Amity University plans to be in 50 countries in the next ten years, the Economist reports.  It has already set up shop in  America, Britain, China, the UAE, and Singapore.There are others such as BITS and Manipal University that have also spread their wings overseas.

Why would Indian institutions want to go abroad when there's a huge untapped market here? And surely, they can't expect to compete with foreign institutions for foreign students?

Well, here's the answer to the puzzle. These universities do not in general cater to the local market abroad. There are plenty of quality institutions overseas to take care of the local market. What the typical Indian institution does is cater to rich kids from India. These kids can't get into, say, Amity University in Delhi. But they can get into the same university in Dubai or Singapore. They are happy to cough up more than what they would pay in India and they either can't get into top schools abroad or don't want to pay the fees of foreign universities.

So, there's a perfect market segment arising from basically the Indian market. Why would Indian institutions not expand their institutions here and take in more students? Because that would dilute the quality of their products in India and affect placement and their brand image. Many do take in some via capitation fee or donations but, taken beyond a limit, this carries risks. Better to cater to Indian students who can't make it here by setting up operations abroad. Then you grow your revenues without compromising on quality in the domestic market.

I daresay this makes for a great case study in market segmentation and pricing.