(Photo: Sean Sllis)

While talking to PaGaLGuY last week, the Indian Institute of Management (IIM), Lucknow director had articulated why it was becoming increasingly important for Indian b-schools to open their doors to foreign students and give a more global colour to their classrooms.

Fresh data shared exclusively with PaGaLGuY by the Graduate Management Admission Council (GMAC) shows that India has a long way to go before it becomes a lucrative international business education destination, although there are mildly encouraging signs of late. The number of non-Indian citizens applying to Indian b-schools using the Graduate Management Admission Test (GMAT) increased by 86% between 2007 and 2011, with as many as 386 GMAT score reports by non-Indian passport-holders reaching Indian b-schools in 2011, nearly twice as many as the 194 score reports in 2007 (indicating that some applicants sent their scores to more than one Indian b-school).

The increased interest in Indian b-schools has been most significant among African, Middle Eastern and Asian (other than Indian) citizens. African and Middle Eastern citizens sent six times as many GMAT score reports to Indian b-schools in 2011 (25) as they did in 2007 (4). Non-Indian Asians too sent more than twice as many score reports in 2011 (170) compared to 2007 (80).

The absolute proportion of foreign GMAT score reports to Indian b-schools however remains a minuscule 2.19% of the total GMAT application pool to India. The foreign interest has in recent times been driven by the one-year programmes at the Indian School of Business (ISB), Hyderabad and the PGPX at the Indian Institute of Management (IIM), Ahmedabad, both ranked among the top 20 global schools in the Financial Times rankings. While ISB claims to have 5.5% of its current student body comprising non-Indian passport holders (29 students in total), IIM-A PGPX has seven non-Indian citizens studying in its 2011-12 batch. Although foreign passport holders, these applicants often tend to be second-generation migrants of Indian ethnic origin looking to get an education in a culturally familiar country.

But to really comprehend how long India has to go in order to become a popular international management study destination, one should consider that in 2011, 45% of the GMAT score reports to US b-schools were sent by non-US citizens and 83% of score reports sent to UK b-schools were from non-Western European citizens.

GMAT test-taking statistics for Central/South Asians in 2011 (Source: GMAC)

Interest in GMAT in India, which had peaked in 2009 has been declining in 2010 and 2011. According to GMAC’s senior manager of statistical research Alex Chisholm, “The decline since 2009 is consistent with the decline seen in domestic management admission tests that Indian candidates appear for. It is possible that continued softness in the global economy might also be influencing candidates to defer their decision to pursue graduate management education.”

There were some signs of recovery in Indians’ interest in the GMAT in 2012, he added.

Nevertheless, India continued to be the third-largest market of candidates taking the GMAT after the US and China, contributing 10% of the total GMAT tests taken in 2011.

Data shared by GMAC also shows that Indians with GMAT tend to apply to a significantly larger number of b-schools (4.3) using their GMAT score than the world average (2.9), their most popular MBA study destinations being the US, India, UK, Singapore and France, in decreasing order. Western European citizens on the other hand are least likely to leave their region to study an MBA, with 60% score reports being sent to France, UK, Germany, Netherlands, Spain, Switzerland, Sweden, Greece or Italy.