India is believed to have had a functioning system of higher education as early as 1000 B.C. Unlike present day universities, these ancient learning centers were primarily concerned with dispersing Vedic education. The modern Indian education system finds its roots in colonial legacy. The British Government used the university system as a tool of cultural colonization. Colonial efforts in higher education were carried out initially through the East India Company, followed by the British parliament and later under direct British rule. The first institution of higher learning set up by the British East India Company was the Calcutta Madrasa in 1781. This was followed by the Asiatic Society of Bengal in 1784, Benaras Sanskrit College in 1791 and Fort William College in 1800. With the Charter Act of 1813, the British Parliament officially declared Indian education as one of the duties of the state. The same act also removed restrictions on missionary work in British India, thus leading to the establishment of the evangelist Serampore College in 1818. Thomas Babbington Macaulay's famously controversial Minute on Education (1835) reflected the growing support of a Western approach to knowledge over an Oriental one. Soon after, in 1857, the first three official universities were started in Bombay (Mumbai), Calcutta (Kolkata) and Madras (Chennai). These universities were modeled after the University of London and focused on English and the humanities.
The British control of the Indian education system continued until the Government of India Act of 1935 that transferred more power to provincial politicians and began the "Indianisation" of education. This period witnessed a rise in the importance of physical and vocational education as well as the introduction of basic education schemes. When India gained independence in 1947, the nation had a total of 241,369 students registered across 20 universities and 496 colleges. In 1948, the Indian Government established the University Education Commission to oversee the growth and improvement of higher education. In the 1960s and 1970s, the government increased its efforts to support higher education by not only setting up state-funded universities and colleges, but also providing financial assistance to private institutions, resulting in the creation of private aided/ grant-in-aid institutions.
Despite the leave of the British, Indian higher education continued to give importance to the languages and humanities until the 1980s. Institutes of professional education like the Indian Institutes of Technology (IITs), Regional Engineering Colleges (REC) and Indian Institutes of Management (IIM) were some of the more prominent exceptions to this trend. These institutions drew inspiration from reputed universities in the United States and also received foreign funding. Post 1980s, the changing needs of the economy, a growing middle class and an increased strain on government financial resources, slowed the growth of state-funded higher educational institutions. This led to an increased role of the private sector in the education system.