The Regulatory Landscape for Edtech Companies in India

This article looks at potential regulations for the fast-growing Education Technology (Edtech) sector. Edtech is crucial for shaping the future of education and workforce development in India. Supporting this sector's growth is vital to building a skilled workforce and boosting economic growth in today’s digital world. By embracing a collaborative and future-focused approach to regulation, policymakers can help Edtech companies in India thrive while protecting consumers and fostering a culture of innovation and excellence in education.

What is the current scope for Edtech Companies in India?

According to Dart Consulting, education technology, or edtech, became a $5.76 billion industry in India in 2023 and is projected to reach $11.51 billion by 2027. Unlike traditional education, this sector provides test prep, K-12 tutoring, skill training, language courses, and higher education certificates. Despite its importance, there are no specific regulations for edtech companies in India, creating challenges for providers and users. Currently, edtech falls under rules meant for e-commerce, which often overlook the unique needs and context of the edtech sector.

What are the different regulatory frameworks for Edtech Companies in India?

Edtech in India is regulated as e-commerce, so rules for consumer protection and information technology apply. Regulatory bodies include Consumer Courts and each state’s Department of Administrative Reforms and Public Grievances. Edtech advertising is overseen by the Advertising Standards Council of India (ASCI), a self-regulatory body. Due to rising customer complaints and government intervention, the Internet and Mobile Association of India formed the Indian Edtech Consortium (IEC) to oversee self-regulation in the sector.

To address misleading advertising, ASCI set guidelines for transparency, honesty, and respect in educational ads, to protect students’ mental well-being from worsening due to deceptive practices.

Other relevant laws include national rules on Intellectual Property, Data Protection, and specific University Grants Commission regulations for online higher education programs.

How do regulatory rules and principles affect Edtech Companies in India?

Education is considered a public good with a major impact on the growth of future generations and the nation as a whole. Because of this, there is high sensitivity around the sector, making fair regulation essential to ensure accountability and trust. A survey by Local Circle found that 66% of respondents believe the sector should be regulated, and 96% support a code of conduct for the packages and subscriptions offered by edtech platforms. Without clear accountability or regulation, edtech companies risk creating information gaps, damaging public trust, and ultimately harming the sector’s long-term potential.

What is the status of regulatory frameworks across the globe for the Edtech sector?

In the United States, the largest edtech market, multiple laws protect consumers. The Children’s Online Privacy Protection Act (COPPA) shields children under 13 from privacy violations by edtech companies. The Family Education Rights and Privacy Act (FERPA) ensures the confidentiality of student educational records. In Europe, the General Data Protection Regulation (GDPR) protects privacy and confidentiality across the continent.

Additionally, industry standards like LTI (Learning Tools Interoperability) enable different online learning systems to work together, while QTI (Question and Test Interoperability) allows a smooth exchange of learning tools, assessments, and analytics. These standards help students switch providers if their current services don’t meet their needs.

What should the Edtech Companies in India be mindful of when it comes to regulations?

A new regulatory framework for edtech should focus on these key principles:

• Protection from Misleading Advertising: Ads should represent features and services without hidden terms. They must avoid content that stirs jealousy, anxiety, or fear of missing out among students.

Imagine an edtech company that advertises “guaranteed top scores” for students enrolling in its test prep courses. However, the fine print reveals this only applies to a select few students who meet specific criteria. With stricter advertising regulations, this company would need to clarify that results may vary. This would prevent implying guaranteed success, reducing unrealistic expectations and stress among students.

• Consumer Data and Privacy Protection: Edtech companies in India must prioritize securing consumer rights by protecting personal, learning, and outcome data from misuse by businesses or criminal groups. This is especially crucial as most consumers now maintain active digital profiles.

An edtech platform collects data on a student’s progress, learning habits, and test scores to personalize content. Without data protection, this information could be sold to third parties, like advertisers or other educational platforms, who might use it to market unrelated products. Under stronger regulations, the platform would need to ensure that all data is stored securely. It must also protect students' privacy by avoiding any sharing of information without their consent.

• Interoperability Regulations: Similar to telecom porting, regulations should allow students to switch to edtech providers if they’re dissatisfied with their current service.

A student subscribes to an edtech service for coding skills but finds that the course quality doesn’t meet expectations. With interoperability rules similar to telecom porting, the student could easily transfer their progress and data to another edtech platform without starting over. This would hold edtech companies accountable, motivating them to maintain quality and customer satisfaction to retain users.

In conclusion

The government should approach edtech regulation carefully, avoiding excessive restrictions that could limit innovation and creativity in the sector. Heavy-handed regulations risk slowing down the industry’s growth and preventing it from reaching its full potential. That’s why policymakers must work with leading service providers, allowing them to share their perspectives and insights.

While accountability and consumer protection are essential, too many regulations could restrict the sector’s agility and innovation. Excessive rules may deter new players and reduce the flexibility needed to adapt to changing educational demands. Strict regulations might also give established companies an advantage, limiting competition and the variety of options available to consumers.

To create a balanced regulatory framework, all stakeholders including prominent edtech providers should be involved. When industry leaders participate in this process, they can help ensure that regulations protect consumers while still encouraging innovation and growth. By collaborating with key players, policymakers can gain a clearer understanding of the sector’s unique challenges, enabling them to develop fair and effective regulations.