India’s Education Sector: Market Landscape, Opportunities & the Rise of Digital Learning

Market Overview

Education is the foundation of a healthy society. Learning begins with the family and is further developed in academic institutions, such as schools, colleges, universities, and other tertiary institutions. India annually allocates nearly 5% of its GDP as the national budget for education. In 2024, the valuation of the Indian education sector stood at over USD 125 billion, with higher education contributing 54%, the K-12 segment accounting for around 39%, and the edtech sector covering the remaining 7%. The industry is expected to grow at a CAGR of over 20% during 2025-30 to reach around USD 330 billion by 2030.

While K-12 refers to school education for children across classes KG to 12^th (covering primary, middle, secondary, and senior secondary schooling), tertiary or higher education denotes learning & training beyond schools and for adults. Vocational education aims to provide practical skills and knowledge for a specific profession (as against traditional academic education). The test prep industry refers to coaching provided as preparation for various competitive recruitment & admission exams. Upskilling & reskilling market refers to structured training provided to acquire and add new skills for professionals and employees. With the implementation of the National Education Policy (NEP) 2020, both school and higher education in India are undergoing constructive transformations.

Growth Drivers & Emerging Trends

India has around 25 crore students receiving K-12 education from 1 crore teachers in nearly 15 lakh schools. It has over 4.25 crore students enrolled in higher education, with an overall literacy rate of 82% as of 2024. It also has nearly 50,000 foreign students, primarily from neighboring countries, the Middle East, and Africa. Policy reforms such as NEP 2020 aim to make education more effective, relevant, affordable, and accessible to all (including collaboration and student exchange with foreign universities). 

Initiatives like Skill India are helping build vocational skills of learners at the tertiary level. Online education, digital learning, and edtech are on the rise with initiatives such as SWAYAM and Digital India, as well as commensurate contributions from the private sector.

India has one of the youngest populations in the world. Middle-class parents and high-income group families prefer to enroll their children in private schools and colleges over government counterparts. 25% of total schools in India are private, enrolling around 38% of the total students. The number is even higher at 75% colleges and 65% students in the case of higher education. Also, during COVID, enrollments in online education had shot up by over 500% across age groups. The trend continues in the form of hybrid learning post-COVID. Emergence of skill universities is also an upcoming trend in both public and private sectors to address specific skill gaps (such as agriculture, automobile repair, electrical wireman, smartphone repair, radiology technician, mechatronics, audiography, and more).

Lucrative Business & Investment Opportunities

Emergence of the Digital Education Ecosystem

The 3 traditional models of edtech are hardware, software, and the systems approach. The hardware approach involves the use of computers, projectors, and interactive whiteboards to facilitate learning for students. Software leverages the psychological principle of learning to create teaching materials, as well as the use of concepts. Systems bring together the hardware and software approaches to create a more effective and economical learning system. Modern edtech also involves tools such as LMS (Moodle, Google Classroom), mobile learning, gamification, immersive technologies such as AR, VR & MR, and AI & adaptive learning.

Edtech can be monetized through various models such as subscription-based services, freemium models offering a free basic version with paid upgrades, and one-time purchases for individual courses or content. 

Other models are B2B licensing to institutions, in-app purchases for extra features, advertising, certifications, and affiliate marketing. Last but not least, a big push for regional language digital learning is coming from government initiatives, educational startups, and MNC technology companies for students to overcome language barriers and empower learners, especially in non-metro and rural areas. 

At the same time, digital learning is still hampered by infrastructure bottlenecks such as the digital divide between the urban & the rural, and a lack of digital literacy & training.

How ‘The India Watch’ Can Help

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