First, I hope you have IRS approval of your selection procedures if you are making scholarship grants directly to individual students.  It could be a taxable expenditure if you don’t.

Assuming that you and your wife want to retain control over the operation for the long term, you could convert to a public charity by getting IRS approval and operating as a public charity for five years.  That would require getting new public support for your organization but if you have friends and connections who are also interested in education of students in India, you may be able to do it.  Assuming you earn as much as 10% investment income on $300,000, about $30,000 a year, you could meet the public support test if you get one-third of your total support from qualified public sources, or about $15,000 a year (averaged over a five-year period). You may be publicly supported with less than the full one-third. (See Ready Reference Page: “Calculating Public Support Percentage”). You will probably have to get IRS approval for your selection process if you haven’t done so already, but that would be part of your application for conversion.

A private operating foundation classification would not be particularly helpful and may not be obtainable because the IRS may not consider a scholarship program to be the direct operation of a charitable service.  Even if it would qualify, you would be committed to spending most of your income for scholarship purposes and would still be operating under the private foundation rules.  Operating foundation status is most helpful in expanding benefits for donors and private foundations that can make additional grants to you.  (See Ready Reference Page: “Private Operating Foundations Are Hybrids”) 

As a private foundation, you could now make grants directly to Indian universities and let them pick the students.  You could more easily make grants for scholarships to U.S. “friends of” charities created for the benefit of Indian universities.  You could conceivably open a scholarship fund at a public charity here in the U.S. and participate in the selection of individual winners.  (A scholarship fund done properly is, by definition, not a donor advised fund which is prohibited from making grants to individuals and could provide you recommending rights.). You would not control the scholarship fund and most sponsors will probably not want to operate a scholarship fund for students abroad.  You might also find a “supporting organization” to a U.S. public charity that would be interested in the project, but again you would not be able to control it.  (See Ready Reference Page: “Supporting Organizations Qualify As Public Charities”)

The ultimate question for you, I think, is whether you can work through other intermediary organizations to select scholarship recipients and spend 5% per year (which you can grow with additional contributions) or whether you want to retain control and raise more public contributions to convert your private foundation to a public charity.  Your choice.