[continuing from my previous post due to char lmit ...]
If India has to maintain its comparative advantage in this arena, it needs to invest heavily in the education sector. We need to have a institution of the caliber of IIT/IIM in every state, each churning out far more students that what an IIT/IIM does today. Surely, the govt on its own will not be able to achieve it and we should endeavor to attract FDI from reputed Western universities, even if it is a for-profit endeavor.
In the long run, India is going to depend on imports to a significant degree, given our huge population and limited natural resources (India is roughly 11 times as dense as the US.) We are going to depend on the rest of the world for energy, food (see how we had to curb some food exports during the recent run in inflation? these are just signs of the times to come), industrial raw materials, machinery, you name it. The Indian Rupee cannot continue to be cheap. This means that our exporters will get hammered, if they cannot contain their costs. Either the exporters will need to move up the value chain (which requires a smarter labor pool) or they need an ample supply of skilled labor. Either way it is going to be crucial for India to generate massive amounts of skilled labor.
Surely, there is no escaping from FDI in the education sector, for the good of the nation.
