Mumbai, Apr 29: Anand Rathi Advisors Limited (ARAL), one of India’s premier investment banking and advisory firms, released a detailed report titled “The Rise of Premium Education in India.”
In this comprehensive report, ARAL analyses the structural transformation underway in India’s education sector as the country transitions from an “access-driven” education system to a “premiumisation-led” ecosystem. The report examines the evolution of India’s education landscape from 1990-2025 and highlights how demographic shifts, rising incomes, urbanisation, literacy growth and changing household aspirations are driving unprecedented demand for quality education.
The report explores key themes shaping the future of premium education in India, including:
- Demographic & Household Transformation: How declining fertility rates, rising middle-class incomes, increasing literacy and urbanisation are driving higher per-child education spending.
- Shift from Access to Quality: The rapid growth of private schools, premium K-12 institutions, international curricula and private higher education institutions across India.
- Growth of International & Premium Education: Expansion of IB and Cambridge schools, rising demand for global curricula and the emergence of foreign university campuses in India following NEP 2020 and UGC reforms.
- Regional & City-Level Premiumisation: Detailed analysis of premium education demand across states and cities, identifying premiumised, transitioning and next-wave cities that are expected to drive future growth.
- Outbound Student Mobility & Globalisation: The growing number of Indian students studying abroad, the resulting forex outflow and the policy response aimed at bringing global education opportunities to India.
- Global Comparisons: Comparative analysis of education premiumisation trends across countries such as South Korea, China, Japan and other developed economies to benchmark India’s trajectory.
The report highlights that India’s education sector is currently at a major inflection point similar to what countries such as South Korea, China and Japan experienced during their high-growth education transformation phases.
According to the report, India’s premium education market is expected to witness strong long-term growth driven by:
- Falling fertility rates leading to significantly higher spending per child
- Rapid growth in middle-class households and rising disposable incomes
- Increasing preference for private and international education
- Expansion of premium schools and higher education institutions into Tier 2 and Tier 3 cities
- Rising household expenditure on education
- Growing demand for globally aligned curricula and international exposure
- Policy reforms enabling foreign universities and international education providers to enter India
The report further states that household spending on education has more than doubled over the last three decades, while India’s private education ecosystem has rapidly expanded across both K-12 and higher education segments.
In addition to analysing the macro trends, the report also includes extensive state-wise and city-wise analysis highlighting how socio-economic indicators such as literacy, income, fertility and household spending patterns are directly linked to premium education demand.
Part B of the report contains brief profiles of 800+ institutions across the K-12 and higher education sector in India and will be available on request.
While unveiling the report, Samir Bahl, CEO – Investment Banking, Anand Rathi Advisors Limited, said:
“At Anand Rathi Investment Banking, education continues to remain one of our core focus sectors. Through our latest report ‘The Rise of Premium Education in India’ we aim to provide industry stakeholders with deep insights into one of the most significant structural transformations taking place in the Indian education ecosystem.
India’s education sector is moving beyond access and entering a long-term premiumisation cycle driven by rising incomes, urbanisation, changing family structures and increasing aspirations for quality education. We believe this transformation will create significant opportunities across premium K-12 education, higher education, international curricula, student mobility and global education partnerships over the coming decades.”
While unveiling the report, Atul Thakkar, Director Investment Banking, Anand Rathi Advisors Limited, said:
“The premiumisation of education in India is no longer a trend, it is becoming a structural inevitability. Families today are investing significantly more per child and increasingly prioritising quality, global exposure and career outcomes. The pattern is unambiguous, every major economy that has seen falling fertility, rising incomes, and growing literacy has gone through this exact transition, and not one has reversed
The combination of demographic shifts, growing disposable incomes, policy reforms and rising aspirations is accelerating demand for premium schools, international curricula, private universities and foreign education partnerships. We believe India is entering a high-growth phase that could reshape the country’s education ecosystem over the next 15-20 years.”
Key Highlights of the Research Findings
- India’s premium education market estimated at $16 Bn (2025) and expected to grow to $45 Bn – $60 Bn (3x-4x) by 2040
- Household education spending increased from 3.2% to 7.7% of household consumption between 1990 and 2025
- Private school enrollment increased significantly while government school enrollment declined over the last decade
- International schools in India expanded rapidly with IB and Cambridge schools witnessing exponential growth
- India is now the world’s largest source market for international students with over 1.25 million students studying abroad
- Premium education demand is expanding beyond metros into Tier 2 and next-wave cities
- Foreign universities entering India expected to accelerate the premiumisation of higher education
- Rising literacy, urbanisation and income growth are creating a structurally strong demand engine for quality education
