India’s test prep market set to reach $26 billion by FY30

MUMBAI: The race for ranks is getting bigger, and so is the business built around it. India’s test preparation market is projected to expand from around $14.8 billion in FY26 to $23-26 billion by FY30, growing at a 12 to 15 per cent CAGR as students increasingly weigh faculty quality, past results and academic outcomes when choosing where to prepare, according to Redseer Strategy Consultants.

Undergraduate entrance preparation remains the largest high-intent segment, with JEE and NEET together accounting for around 70 per cent of UG entrance market revenue. The UG entrance preparation market itself is expected to grow from approximately $3.8 billion in FY26 to $6.5-7 billion by FY30.

The intensity of the competition helps explain the spending. IIT admission rates stand at around 1 per cent, while the success rate for preferred government medical seats through NEET is approximately 3 per cent, making preparation a high-stakes investment for students and families.

For students choosing offline coaching, faculty quality emerged as the strongest consideration. Some 57 per cent of aspirants ranked it among their top three selection factors, while 44 per cent cited past ranks or results. Among students targeting a rank below 1,000, the numbers rise to 59 per cent for faculty quality and 51 per cent for past results.

Students are also showing a preference for commitment rather than a coaching buffet. Most aspirants have one primary institute around which they structure their study calendar, testing cycle and preparation, while other providers are typically used for supplementary requirements such as revision, doubt solving and test series.

That preference is also reshaping the geography of coaching. Traditional preparation hubs such as Kota, Delhi and Hyderabad are facing growing competition from credible options closer to students’ homes.

Redseer found that 71 per cent of Tier 1 aspirants and 67 per cent of Tier 2-plus aspirants surveyed outside the major hubs were unwilling to relocate for preparation. The Tier 1 markets included Mumbai, Kolkata, Ahmedabad, Lucknow, Jaipur, Indore and Bhopal, while Tier 2 examples included Durgapur, Bharuch, Hamirpur, Dhanbad, Agartala and Belgaum.

The economics of staying local are hard to ignore. Annual education costs are estimated at Rs 2.5-2.8 lakh in key coaching hubs, compared with Rs 1.1-1.4 lakh in non-hub cities. Once accommodation, food, travel and relocation are added, moving to a traditional coaching centre can make the preparation bill considerably heavier.

Online preparation, meanwhile, has travelled a long way from its early days of supplementary YouTube videos between 2012 and 2016. The segment has evolved through structured courses and apps towards hybrid formats, adaptive practice, AI-enabled personalisation and progress tracking.

But having a digital classroom does not automatically translate into a top rank. Distribution-first online platforms accounted for only 0-2 per cent of the top 100 JEE Advanced and NEET UG ranks in 2026. National institutes accounted for 88-93 per cent of the top 100 JEE Advanced ranks and 76-78 per cent of the top NEET UG ranks.

Redseer attributes part of the gap to how students use online platforms. A large number of digital learners continue to treat them as supplementary tools rather than making them their primary institute for preparation.

The next phase of online education is therefore moving towards an outcome-led model, built around a continuous loop of teaching, testing, diagnosis and intervention. Student activity can help identify weak concepts, personalise learning content and trigger targeted intervention from teachers.

The lines between physical and digital coaching are also beginning to blur. Offline-first institutes are taking their established academic systems into technology, while online-first players are adding classrooms, in-person doubt resolution and standardised testing.

As the test preparation market heads towards as much as $26 billion by FY30, the coaching battle is no longer simply about who can teach more students. Increasingly, it is about who can prove that the teaching translates into better outcomes.