Only IIT Delhi and University of Delhi figure in the world's top 200 universities compared to 49 from the USA, 30 from United Kingdom, 11 from Germany and 8 from China and Australia, according to a study by an industry body.
A joint study by ASSOCHAM and Yes Institute said it becomes imperative for the country to learn from global best practices.
"The top talent goes to developed countries for studying, research and contributing intellectual capital as well as economic value to other countries. An estimated six lakh Indian students are studying abroad, spending over USD 20 billion annually," the study said.
Only 16 per cent of the Indian firms carry out any in-firm training themselves, as against 80 per cent of Chinese firms.
The study indicates that only a small portion of Indian graduates are considered employable. The National Employability report 2013 pegged that employability was less than 25 per cent in almost all job functions across education streams- science, commerce, arts etc.
It said India's higher education sector faced many challenges such as low level employability, lack of research as well as limited scope for innovation and entrepreneurship.
"To overcome them it is critical to align the higher education system with emerging economic realities and industry requirements as well as introduce well-structured and futuristic education frameworks," it added.