There has always been a power struggle regarding control over the administration of the university. In the Enlightenment era, the contenders were the State and the Church. However, as the role of the Church in modern educational institutes declined, the state clamoured for greater control (Delanty, 2001b; Rüegg, 1992). In the 1990s, academic autonomy was under the purview of the university. This in turn gave impetus to greater mobility of students across borders and to the larger process of Internationalization of Higher Education (IHE). However, in the post-democratic era, the autonomy of universities was severely restricted and research and curriculum were tainted with a protectionist attitude (Altbach and De Wit, 2018; Jenkins et al., 2018). Emerging conflicts between the state and the university highlight the urgent need to understand and assess state-university relations in the new political climate. Under these circumstances, the process of IHE has borne the brunt and in the last decade, we have seen a decrease in international outbound student mobility, an increase in the cancellation of offshore campuses and other cross-border education activities. While the process of IHE is still maintained, the original aim of this process, to tackle global issues with a local perspective while providing an inter-cultural university education is at risk. This paper examines the changing dynamics of state-university relations and their implications on the process of IHE.