Education serves as backbone for development of any country. University system in India is extraordinarily rigid and pronouncedly resistant to change: The impetus to change does not come from within the system. No doubt, Higher Education has attained a key position in the Indian knowledge society under globalised economy. The present paper makes an attempt to study the current status of Indian higher education and challenges surrounding it. However, the challenges faced are immense and far-reaching individuals, Institutions, Systems and Societies is not only clear but also not comprehendible at this moment unless it is viewed in the context of various other factors that are simultaneously operating on the higher education system. Some agree that there is rapid cross national flow of people, goods, capital and information may dissolve the nation State, push institutions (university is the one) into a common mould where as others disagree. It is assumed that globalization promises dramatic and rewarding change in the higher education systems, societies, it may threaten the stability needed to build well performing higher education system. The paper may further highlight the contribution of the universities in producing talent and their competitiveness against the foreign universities and institutions. It is also true, that so far globalization has given the advanced economies a huge advantage as they had made enough preparation prior to its launch, while others are caught in the trap without any preparation. The paper puts lights on benefits of globalization to different section of society and Indian education system at large. The emergence of globalization in Indian education system may bring foreign universities on Indian soil as well as global faculty mobility, even research mobility & student exchange programme, both teaching & student community gets a nod for global exposure.