ߣߣÊÓƵn universities have been told not to treat India as another market from which to attract fee-paying students.

Glyn Davis, chair of ߣߣÊÓƵ's Group of Eight research-intensive universities, said last week that India's higher education and business leaders wanted ߣߣÊÓƵn universities to establish campuses in India and not to behave as "aggressive marketers in Asian countries".

Professor Davis, who is vice-chancellor of Melbourne University, was speaking during a visit to India with John Howard, ߣߣÊÓƵn Prime Minister. His comments followed meetings with the Indian University Grants Commission and with university and business heads in New Delhi, Chennai and Mumbai.

Professor Davis said the key message he had received was the importance of ߣߣÊÓƵ understanding the economic transformation of India and contributing to its development.

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"(They all) stressed that ߣߣÊÓƵns have not grasped the fundamental shift in capacity across India, and are not yet seeing Indian companies and universities as partners," he said. "This need to deal with India as a partner rather than just another market has been stressed in every encounter."

India recently relaxed foreign investment restrictions in the education sector and adopted administrative changes that were expected to encourage ߣߣÊÓƵn institutions to form partnerships in the country. Professor Davis predicted that many educational joint ventures would be formed with Indian universities and colleges over the next decade.

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He said that India was particularly interested in vocational education and had recently adopted ߣߣÊÓƵ's national qualifications framework in its entirety.

India was also keen to increase the postgraduate training provided by ߣߣÊÓƵn universities in business, IT, engineering and the professions, Professor Davis said. As India had more than 300 universities and 19,000 colleges, students were less interested in gaining undergraduate degrees in ߣߣÊÓƵ.

India is ߣߣÊÓƵ's second largest education market after China and this year ߣߣÊÓƵn universities are expected to enrol some 30,000 Indian students, the great majority postgraduates.

Chinese students comprise a quarter of all overseas students in ߣߣÊÓƵ, while those from India make up less than 10 per cent. But the number of enrolments from India continues to rise sharply whereas the growth from China has stalled.

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Professor Davis welcomed an announcement by Mr Howard that ߣߣÊÓƵ would allocate A$25 million (£10.6 million) over the next five years to support bilateral research collaboration and exchange scholarships with India.

He said the money would provide a significant boost to current collaborative research with India in biotechnology as well as in engineering and information technology, biomedicine and business.