In the 21st century education is a powerful tool to build knowledge-based society. Indian education sector is one of the pillars of Indian economy. India is a very profitable destination for investment in education sector because of the high demand and market size. At present, India’s Gross Enrolment Ratio (GER) is 15 per cent in higher education which is much lower than the world average of 23 per cent. The aim to increase the GER to 30 per cent by 2020.India’s gross outbound enrolment ratio is of 0.11 per cent, which is quite low compared with many other Asian countries. This paper highlights the inflow of FDI in education sector in India and based on secondary sources. During the period of January, 2012 to may 2015, FDI has increased from Rs 2,306.12 Cr to Rs 6, 227.51 Cr respectively. The percentage of FDI in education has increased slightly from 0.31 to 0.45 for the same period. The future of higher education services will be shaped by domestic factors, like the domestic regulatory framework and the State of the domestic Education System in terms of quantity, quality, costs, infrastructure and finances.