Surabhi Gupta
New Delhi: The unemployment problem in India is getting worse because of a gap between the academic and real-world problem scenarios. Fresh graduates keep failing to get jobs as businesses are accelerating the adoption of Artificial Intelligence (AI), and automation. Companies are looking for people who can pivot to new industry needs in no time at all.
Just 42.6 per cent of Indian graduates made the Employable list, a decline from 44.3 per cent to the India Graduate Skill Index 2025 by Mercer-Mettl projections In 2025. So, amongst graduates, just 57.4 per cent is not available boys to these workplaces. The employability gender gap has however only recently been considered and both 43.4 % of men and 41.7% Of women score as employable.
Trending: AI, Data Science and Soft Skills
Among the top job sectors in demand are AI and data science roles. With a 46% employability rate in AI and ML (machine learning), the report indicates that demand for technical skills continues to rise. Soft skills, apart from technical skills like ;
Communication (55.1 per cent), Critical thinking (54.6 per cent), Leadership (54.2 per cent). However the problem for creative professionals 44.3 employability score.
Top Performing States and Tier-1 Colleges
Employability rates for graduates from Tier-1 institutes (48.4 per cent), Tier-2 (46.1 per cent) and Tier-3 (43.4 per cent)
State wise: The report highlights that among the states, Delhi (53.4%), Himachal Pradesh (51.1%) and Punjab (51.1%) produce the most employable graduates because of good educational infrastructure and industry collaborations.
Challenges in the Job Market
The biggest challenge remains the widening skill gap between education and industry needs. Many graduates lack practical knowledge and struggle to adapt to real-world job scenarios. Contributing factors include:
Traditional education system: Focus on theoretical knowledge rather than practical applications.
Rapid AI advancements: Automation is reshaping job roles, requiring continuous upskilling.
Limited non-technical training: Many graduates lack essential workplace skills like teamwork and adaptability.
Tesla’s Hiring Spree in India
Amidst rising concerns over employment, Tesla Inc. has announced job openings in India, fueling speculation about its market entry. The company has listed 13 positions, including service technicians and advisors in Mumbai and Delhi. The Indian government’s decision to reduce import duties on luxury EVs from 110% to 70% has further strengthened the possibility of Tesla’s expansion.
What’s Next for India’s Workforce?
To address the employment crisis, experts suggest:
For students: Focus on AI, data science, and digital marketing, along with soft skills like communication and teamwork.
For colleges: Shift towards industry-focused learning and practical training.
For employers: Provide internship programs and on-the-job training to bridge the skill gap.
With industries evolving rapidly, India's job market is at a crossroads. Addressing skill shortages and aligning education with industry demands will be key to securing a future-ready workforce.
Challenges with the Job Market
The skill gap between educational and industrial demands is still, without a doubt, the number one challenge. Most of the graduates are devoid of real-life knowledge and fail to fit into the actual job situations. Contributing factors include:
Conventional pedagogy: Concentration in theoretical knowledge at the cost of applications.
Fast progress in AI: Automation redefines your roles, need to learn all the time.
Forthcoming non-technical training — Most graduates are missing out on basic workplace competencies like teamwork or flexibility.
The Hiring Craze at Tesla in India
As joblessness mounts, Tesla Inc has opened applications in India and the rumour mill goes wild about its intended move. The company has open for hire 13 roles as well, service technicians and advisors in Mumbai and Delhi. Possibilities that Tesla may expand: The Indian government cut import duty on high-class EVs from 110% to 70%
To fix the employment issue, solutions from experts include:
For Students: Also learn AI/machine learning/Data Science & digital marketing with communication and soft teamwork.
For Colleges: Move in the direction of industry-driven learning & work-related training.
For Employers: Introduce internship and in-job practices to bridge reliance on talent.
Chandrasekhar Sripada, Clinical Professor of OB at ISB, told ETV Bharat, “The primary reason for the employability gap is the way we approach skill development. We do not design skills training programs by first identifying the actual job roles available in the market and then working backwards to determine the necessary skills. Instead, we focus on trending skills without considering their real-world demand.
For example, in the media industry, if we train journalists solely for print media while the industry shifts towards digital platforms, those individuals will struggle to find employment. The key to making people employable is to align skill training with actual job market needs—a practice that needs to be improved in our country.
Another major issue is the mismatch between education and employment. We are currently training people. The second factor is the quality of training. In our system, education does not necessarily lead to skill development. For instance, why would a B.Sc. or B.Com. Graduates easily secure a job if they haven’t acquired any practical skills.
Simply reading about banking in theory is very different from working in a bank. Similarly, a degree in science does not teach someone how to work in a laboratory or factory. This disconnect between education and practical skills is what the National Education Policy (NEP) aims to address.
The solution lies in first conducting a realistic assessment of job opportunities, then developing skills accordingly, and creating stronger linkages between education and industry. Only by making education more skill-oriented can we bridge the employability gap and bring meaningful change.”
Komal Srivastava, an educationist, told ETV Bharat, “Our education system does not provide enough opportunities, making students highly dependent. Creativity is never nurtured from the start, and the focus remains on marks and percentages rather than holistic growth."
Srivastava said, "This rigid system forces students into a mould, limiting their personal development and independent thinking. Coaching institutes worsen this issue by pushing students into fields they may not even be interested in, often due to parental pressure. As a result, children lose the freedom to explore their true potential. This lack of opportunities also contributes to high dropout rates."
"Many students leave the system either because of financial constraints or because their intellectual growth is not being fostered. A 1992 committee report highlighted that most dropouts occur because the system fails to develop students’ minds. Instead of creating diverse pathways, education forces children into a singular stream, where industries recruit them for placements," Srivastava added.
She further said, "However, not every student wants to—or should—follow this conventional path. Even skill development programs fail to equip students with the necessary expertise. Coaching institutes cater to only a few thousand students, while millions are left behind, their futures uncertain."
"What happens to those who don’t make it through? There are two key issues: First, our education system does not provide students with the opportunity to truly explore what they want to do. Second, while we may earn degrees, we lack the competence to apply them effectively. As a young nation, our policymakers and educationists must rethink the system and decide what kind of future we want to create for our children,” she added.
Yogesh Rai, Professor from JNU told ETV, “The rapid pace of technological advancements and the constant evolution of job roles are key drivers of the widening skills gap. Traditional education systems often struggle to keep pace with these changes, resulting in graduates who may not possess the skills needed by today’s employers.
Key factors include:
- The speed of technological progress: Emerging technologies like AI, data science, and cybersecurity require specific skills that many graduates lack.
- Skills gap analyses: Many industries have specific needs that are not being met due to outdated curricula.
- Need for continuous learning: With the speed of change, skill development must be an ongoing process to stay relevant.
- Lack of skill-oriented curricula: The education system often focuses on theoretical knowledge rather than practical, industry-relevant skills.
- Skill-oriented educational curricula: Developing courses that focus on practical, hands-on skills.
- Promoting continuous learning: Encouraging upskilling and re-skilling programs for youth.
- Targeted training: Addressing specific industry needs through tailored training programs.
Universities and policymakers must work together to modernize the education system and ensure it meets the demands of today’s job market.
Key strategies include:
- Robust collaboration between academia and industry: Ensuring that educational institutions stay in sync with industry trends and needs.
- Vocational training and apprenticeships: Universities should integrate practical, work-based learning into their curricula.
- Timely updates to curricula: Introducing emerging technologies, soft skills, and industry-relevant knowledge to the syllabus.
- Government initiatives:
- The New Education Policy (NEP) focuses on multidisciplinary and skill-oriented education, which is a step in the right direction.
- Support from programs like Skill India: Initiatives such as the Skill India Digital platform, PMKVY, and the Craftsmen Training Scheme aim to bridge the skill gap by training millions, with a special focus on female participation.
Suggestions:
- Industry-specific skill development tailored to local demand.
- Public-private partnerships to improve access to industry-relevant training and apprenticeships.
- More inclusive outreach, particularly to rural and underserved populations.
- As industries increasingly demand specialized skills, students must prioritize acquiring competencies that are both relevant and adaptable to future roles.
- Key skills include:
- Technical expertise in fields like data science, AI, cloud computing, cybersecurity, and the latest programming languages.
- Digital marketing and social media management skills are crucial in today’s tech-driven market.
- Critical thinking and innovative problem-solving abilities.
- Soft skills, such as emotional intelligence, teamwork and the ability to communicate across cultures.
- Financial acumen to understand business and economic implications in their work.
- AI and automation are transforming employment opportunities by not only automating routine tasks but also redefining job roles and creating new opportunities for workers.
Key impacts of AI include:
- Automation of routine tasks: Many traditional jobs are evolving with AI taking over repetitive work, allowing employees to focus on more strategic and creative tasks.
- Creation of new roles: AI has led to the emergence of new jobs in fields such as machine learning, AI development, and data science.
- Enhanced productivity: AI amplifies human capability, making workers more productive and efficient.
- Entrepreneurial opportunities: AI is fueling the growth of startups, particularly in areas like consulting and customized AI solutions.
- Improvement in job quality: Rather than just increasing job quantity, AI is elevating job quality by eliminating tedious tasks and enabling more meaningful work.
Challenges and considerations:
- Ongoing reskilling and upskilling: To remain relevant in an AI-driven world, continuous skill development is crucial.
- Ethical concerns: The rise of AI also raises questions about decision-making, fairness, and inclusivity in hiring practices.”
