India is facing a youth unemployment crisis as a decline in white-collar jobs, particularly in the information technology sector, has left many fresh graduates and young people without job opportunities. According to data from the Centre for Monitoring Indian Economy, unemployment rates among 20- to 24-year-olds rose to 44.49% in the last quarter of 2023, while rates among 25- to 29-year-olds increased to 14.33%. This is a concerning trend for a country with the world’s largest youth population, with 43.3 million university enrollments reported in the fiscal year ending March 2023.
Chandra Garisa, CEO of recruitment firm Foundit, highlighted the disconnect between India’s economic growth and job creation, particularly in the IT sector. Automation and artificial intelligence adoption have led to a decline in white-collar jobs, with IT hiring activity dropping significantly. Online hiring for IT hardware and software roles decreased by 18% in the previous year, and there was an overall 5% decline in job postings across all sectors. The IT sector, which employed 5.4 million people in the fiscal year ending March 2023, is struggling to keep up with the evolving job market.
Youth unemployment in India is also exacerbated by a skills mismatch, according to Garisa. Many students are trained for IT-related roles, but job creation is happening in the manufacturing sector. This mismatch is driven by a shift in demand across sectors and technological advancements that render some basic skills irrelevant. Job postings in the manufacturing sector saw a 6% increase in February compared to the previous month, while IT postings declined by 9%. This highlights the changing landscape of job opportunities and the need for young people to adapt to emerging sectors.
In the manufacturing sector, there has been a growing demand for AI and technical skills, with positions for data analysts and junior technical software engineers experiencing significant growth. However, there is still a perception among youth that careers in manufacturing are inferior to those in IT, which may prevent some candidates from pursuing new job opportunities. Garisa emphasized the need for graduates to shift their focus towards industries with promising job growth, as the requirements for entry-level roles are constantly evolving. Adapting to these changes is essential for young people to secure quality career opportunities in emerging sectors.
Ultimately, there is a significant mismatch between job demand and the skills possessed by India’s youth, contributing to the country’s high rates of unemployment among young people. As the job market shifts towards sectors like manufacturing, which are experiencing growth and opportunity, it is essential for students and graduates to acquire the necessary skills to thrive in these industries. By addressing this skills gap and adapting to the evolving job market, young Indians can improve their employment prospects and contribute to the country’s economic development. Efforts to bridge this divide between skills and job opportunities are crucial in addressing India’s youth unemployment crisis.
