A USI is required for students undertaking nationally recognised training (qualifications, accredited courses, skill sets and units of competency) unless exempt. This includes international students studying in Australia. If you don't have a USI you will not receive your qualification or statement of attainment.
Your USI will allow you to have online access to a record of the training you have done since 1 January 2015. You will also be able to produce a comprehensive transcript of your training. This can be used when applying for a job, seeking a credit transfer or demonstrating pre-requisites when undertaking further training.
If you are an International student studying offshore you do not need a USI.
If you are an Australian expat or resident living overseas and have an Australian ID, you need a USI even if you do the VET course while outside of Australia.
If you are an International student studying in Australia you require a USI. Note that you cannot apply for a USI whilst you are still overseas. You will only be able to apply for a USI once you have entered Australia using your non-Australian passport and Australian visa.