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The E-learning market in India is a market largely unpenetrated valued at $60 billion and is expected to grow at a CAGR of 20%. Increasing Internet penetration, low existing coverage and rising demand are expected to develop this market strongly in the near future. This sector has attracted large investments and is slated to lead to strong growth opportunities for the education sector.

The key factors leading to the growth of the E-learning market in India include low education coverage, rising demand from various segments, growing personal computers and internet penetration, increasing government participation and convenience factors. Strong opportunity exists in the market due to low coverage of education in India. This coupled with the fact that demand from other education segments are rising, will drive the E-learning market.

Indian youth are technology-driven today and find e-learning to be especially appealing. For young working professionals with a desire to escalate their careers faster, E-learning is convenient as they can pursue their degrees in their own space and time.

But it was in the 90’s that the E-learning industry came into focus. Since then, it has been able to attract several investments. In fact, the expected annual growth in India is predicted to be anywhere around 20%-25%.

Global companies in sectors like KPO’s, BPO’s, publishing houses (ElementK, McGraw-Hill, Lionbridge, Skillsoft, IBM, and Oracle) along with domestic retail education have established centres in India. Companies like NIIT and Tata Interactive Systems are considered pioneers of the industry.

So far, the industry has really made an impact in the corporate segment where it is seen as a means of attaining business goals and motivating employees. However, users are now becoming more educated about its advantages and the industry is strengthening steadily. Indian Corporate houses can successfully integrate E-learning into their strategic plan, which can thereby improve employee ability and performance.

Key trends in the E-learning market includes PE/VC investments in e-learning segment, proliferation of E-learning devices, foreign universities offering online courses and focus on digital content for schools. Recently, the education sector has seen many PE/VC deals in E-learning segment on the back of growing demand for digital content in schools and online courses. Moreover, online courses are now being offered by foreign universities and even E-learning devices have increasingly become popular.

In 2011, the Indian government decided to subsidize 12 million Aakash tablets at $35 per tablet opening up online learning to a vast number of Indians (800 million) who currently have no Internet access, but who do have mobile phones. The Aakash deal stimulated India’s already burgeoning e-learning industry to produce content, programs, degrees and learner support for such students. In 2009 Researchandmarkets estimated the market size to touch $603 million by the end of calendar year 2012.

Up to now, most E-learning companies in India have been marketing externally, and have focused on corporate training and informal learning, but there are signs that this year the focus will be on providing E-learning products, services and programs for Indian students. English is widely used in Indian post-secondary education, and the move to OERs will enable Indian institutions to move quickly into online learning with what will be perceived as quality learning materials from reputable organizations (such as MIT).

The key challenges identified are accreditation and recognition issues, expensive mode of education and lack of awareness and acceptance. There is still institutional resistance to online learning. Whilst the Aakash tablets have helped to stimulate the E-learning market it is important to remember the costs of Internet access and the lack of bandwidth in many rural areas. There is also a lack of attention paid to instructional design and learner support leading to high drop-out.

E-learning has many processes that can be outsourced. By the end of 2012, it is estimated that the Indian E-learning offshore industry will touch $603 million. At present, the industry employs more than 11,000 people and is estimated to stand at around $316 million in revenues.

Of course, in the education and training market, to be a part of the E-learning industry is working in a growing field. Even though the sector is facing its share of challenges, with emerging technologies and awareness, this year around, it will surely become a stronger one.