Indian students spent a massive $6.54 billion in the US in 2016-17, up 30% from the previous year, dwarfing the North American country’s foreign direct investment (FDI) of $2.37 billion in India. (Image: Reuters)

Indian students spent a massive $6.54 billion in the US in 2016-17, up 30% from the previous year, dwarfing the North American country’s foreign direct investment (FDI) of $2.37 billion in India. Of course, a large part of US FDI routed through low-tax jurisdictions like Mauritius is not counted here, although recent changes in tax treaties have made the route a bit less attractive. Among large countries, India was outstripped by China in 2009-10 to become the largest place of origin of students coming to the US, with correspondingly high spending. However, in recent years India has been bridging the gap with a scorching pace of growth in students it sends to the US — 29% in 2014-15, 25% in 2015-16 and 12.3% in 2016-17. Between 2010-11 to 2012-13, when the global financial meltdown hit the US economy badly, there was negative growth in Indian students going to that country. Chinese students spent $12.55 billion in the US in 2016-17, up about 10%.

“The American higher education system introduces international students to networks and contacts that provide benefits and advantages over a lifetime,” said Karl M Adam, deputy cultural affairs officer at the US embassy in India. Most of the Indian students in the US pursue graduation courses in mathematics, computer science and engineering. For the record, the US was the fifth largest source of FDI for India in 2016-17, behind Mauritius, Singapore, Japan and Netherlands. Though services FDI fared better, US investments in India’s manufacturing sector needs to grow, officials here feel.

According to Open Doors, a study by the Institute of International Education along with the US government’s education department, students from India and China now represent approximately 50% of the total enrolment of 1.08 million international students in the US. Indian students comprise 17.3% of all international students in the US, it added. The continued growth in international students coming to the US for higher education has had a significant positive impact on its economy. About 1.08 million international students studying at US colleges and universities contributed $36.9 billion and supported more than 450,000 jobs to its economy during 2016-2017, said NAFSA, an association of international educators.

Open Doors reported that about two-thirds of all international students receive the majority of their funds from sources outside of the US, including personal and family sources as well as assistance from their home country governments or universities. Interestingly, the number of US students coming to India to study for academic credit at their home university has been on the decline since 2013-14 and it fell by 5.8% to 4,181 in 2015-16, as they increasingly prefer European countries. India’s rank in terms of outbound destination for US students also declined to 15 from 13.