Vineet Kapur, a native of India, is a man of tradition. That's why he followed his grandfather and father by going abroad in search of a good education. He earned his MBA in 1999 from the William E. Simon Graduate School of Business Administration at the University of Rochester. Since then, he has worked at Morgan Stanley and is now managing director at Blackstone Alternative Asset Management in New York.
But he doesn't rule out someday returning to India. "There are so many opportunities," says Kapur.
The burgeoning Indian economy is creating a serious demand for high-quality managers to oversee the nation's growing businesses. That makes the MBA a valuable commodity that insures a quick return on investment.
And the growth of India's middle class means more Indians than ever before are able to afford brand-name American degrees. As a result, even though foreign applications to American B-schools have dropped overall since visa restrictions were tightened after September 11, 2001, applications from Indian students are increasing.
In just the last year, the number of Indians taking the GMAT (the test required for entrance to most American B-schools) increased nearly 19%, reaching 7,123, according to the General Management Admission Council (GMAC).
The Class of 2007 at the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill boasts its highest number of Indian students in the past seven years, with a total of 20 out of about 275.
Similarly, while the overall applicant pool decreased 9% over the last year at the Tepper School of Business at Carnegie Mellon University in Pittsburgh, which usually receives close to 2,000 applications, the number of Indian MBA applicants rose 16%. Enrollment of Indian students at UCLA's Anderson School of Management, which has a student body of about 670, is up 28% since 2004, with a total of 25 Indian students.
Even more interesting is how many of the newly minted Indian MBAs plan to use their degrees back home. Just a decade ago, the Indian population was lamenting a brain drain.
Now, it's heralding a renaissance, says R Ravi, associate dean for intellectual strategy and professor of operations research at Tepper. About 50% of Indian applicants to Anderson said they wanted to return to India after graduation.
"There's a desire for Indians to get trained to help their own country move forward progressively," says Rosemaria Martinelli, associate dean of student recruitment & admissions at the University of Chicago Graduate School of Business.
Degree of heat
One such student is Ankit Gupta, who is in his first year at Anderson. He represents a growing number of second- and third-generation Indian entrepreneurs who are earning an American MBA as a way of garnering skills to lead a family business.
"India is a land of opportunities," he says. "It's very easy to make money," and the MBA gives you a valuable platform, he adds. Gupta says he plans to return home directly after graduation.
There's no question that the degree is becoming more important in India. Since the economy's liberalization in the early 1990s and the proliferation of profitable outsourcing companies, B-schools have been sprouting all over the country, with more than 1,100 now in India, says Arnab Laha, assistant professor at the Indian Institute of Management, Ahmedabad. New schools are opening all the time.
But the competition is fierce. For instance, 133,000 people applied to IIM Ahmedabad in 2005. The school usually admits only about 1% of those applicants, and in 2004 100% of those admitted enrolled in the program.
Those who don't make the cut are usually well qualified and find they have a better chance in the US. Most of them speak English fluently, so language isn't a barrier.
Plus, few Indian schools -- excepting a handful that include the IIM campuses -- can offer the same breadth of B-school education that the top US programmes offer, says Shyam Sunder, the James L Frank professor of accounting, economics, & finance at the Yale School of Management in New Haven, Conn. The MBA is just too new to them.
It's too early to tell if Corporate America is losing out due to the number of Indian students choosing to go back home after garnering some experience in the US.
But some India-based recruiters are concerned that they won't be able to afford to hire back talent that has been earning the significant pay typical of American MBAs. Starting salaries are upward of $80,000 in the US and only $18,000 in India, although the cost of living is lower, says Rohtash Mal, CEO of AirTel, Bharti Televentures in New Delhi.
"Even so, after adjusting the purchasing power parity between the two countries, top-level MBA hires from Indian business schools would certainly be more cost-effective for the Indian market -- at least for the foreseeable future," says Mal.
Still, students say it's the long-term opportunities and the chance to be a part of their country's exciting new economy that's driving their decisions to return to India -- not short-term return on investment.
Besides, for some American-based corporations that are looking for Indian nationals to work in their divisions abroad, an international employee with a desire to go home -- and firsthand knowledge of the culture -- is a treasure.
B-schools and businesses will be keeping a close watch on what's happening in one of the fastest developing regions on the planet. "The economic development of the world depends on human capital," says Mark Zupan, dean of the Simon school.
"India has the numbers, talent, and motivation." Now, that sounds like the stuff of which Mumbai dreams are made.