India’s Premium Education Market May Grow 3x-4x By 2040: Anand Rathi Advisors report
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India’s premium education market could expand three to four times over the next 15 years, growing from an estimated $16 billion in 2025 to $45 billion-$60 billion by 2040, according to a new report by Anand Rathi Advisors Limited.
Released on Tuesday, the report, titled The Rise of Premium Education in India, argues that the country is entering a long-term “premiumisation” cycle in education, driven by rising household incomes, falling fertility rates, urbanisation and growing demand for better learning outcomes.
The investment banking and advisory firm said India’s education sector is shifting from an “access-driven” model, focused on enrolment, to one increasingly centred on quality and global exposure.
The report points to sharp changes in household behaviour over the past three decades. Education spending as a share of household consumption has risen from 3.2 per cent in 1990 to 7.7 per cent in 2025, while families are spending more per child as family sizes shrink.
Private schools and premium K-12 institutions are gaining ground as enrolment in government schools declines, the report said. It also highlighted rapid growth in international curricula, with IB and Cambridge schools expanding across the country.
According to the report, demand for premium education is now moving beyond metro cities into Tier 2 and emerging urban centres, supported by rising incomes and improving socio-economic indicators.
India is also the world’s largest source market for international students, with more than 1.25 million Indians studying abroad, the report noted. It said policy changes under the National Education Policy 2020 and UGC reforms could help retain part of that demand domestically by enabling foreign universities to establish campuses in India.
Samir Bahl, CEO of Investment Banking at Anand Rathi Advisors, said the education sector is undergoing one of its most significant structural shifts.
“India’s education sector is moving beyond access and entering a long-term premiumisation cycle driven by rising incomes, urbanisation, changing family structures and increasing aspirations for quality education,” he said.
Atul Thakkar, Director of Investment Banking at the firm, said the trend mirrors education transitions seen in countries such as South Korea, China and Japan during their high-growth phases.
“The premiumisation of education in India is no longer a trend. It is becoming a structural inevitability,” he said.
The report includes state-wise and city-wise analysis of premium education demand and profiles more than 800 institutions across K-12 and higher education.
