Friday, 20 Jun, 2025
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AI-driven innovation can elevate India from a low-cost IT hub to a global leader, boosting demand for high-value skills and new business models. Successful adaptation by enterprises and workers could accelerate economic growth and strengthen global competitiveness.
As emerging technologies reshape job markets, India has intensified efforts to equip its workforce with industry-relevant skills. Yet, a recent report by online talent assessment platform Mercer | Mettl raises concerns over the employability of Indian graduates.
While the unemployment rate for those aged 15 and above has nearly halved from 2017-18 to 2023-24, and youth unemployment (ages 15-29) has declined to 10.2 per cent from 17.8 per cent over the same period, employability levels have worsened. The India Graduate Skill Index 2025 shows a decline from 44.3 per cent in 2023 to 42.6 per cent in 2024, reflecting persistent skill mismatches.
Although graduate unemployment has fallen in both rural and urban areas, corporate India continues to flag concerns over job readiness. The data underscores the urgency for deeper industry-academia collaboration and policy interventions to bridge the gap between education and employability.
A recent Bloomberg Intelligence study identifies banking and finance as among the sectors most vulnerable to artificial intelligence (AI)-driven disruption. This aligns with a Citi report from June, which estimated that 54 per cent of banking jobs face a high risk of automation—making finance the industry most exposed to workforce displacement.
The software sector is also experiencing disruption, as AI-powered tools increasingly take over coding and automation tasks once handled by engineers. This shift signals a broader transformation in white-collar employment, where productivity gains could come at the cost of job security.
However, Microsoft founder Bill Gates highlights energy, biosciences, and AI system development as industries where human expertise remains indispensable. These fields require adaptability and specialised skills that AI cannot easily replicate, offering more resilient career pathways in an era of rapid technological change.
Notably, the vast technology sector faces a dual reality—AI-driven automation threatens entry-level programming roles, yet the same forces could unlock new opportunities. As core IT services evolve, mass redundancies may emerge, particularly in low-skill segments. The challenge is clear: without rapid workforce reskilling, AI could become a net disruptor rather than a growth catalyst.
However, AI-powered innovation has the potential to create fresh demand for high-value skills and new business models. If India’s enterprises and workforce successfully adapt, the digital ecosystem could transition from a low-cost IT hub to a leader in AI-driven transformation.
Experts say companies need to accelerate upskilling initiatives, while policymakers may push for education reforms to align talent with emerging AI demands. If India capitalises on this transition, it could reinforce its global tech dominance—otherwise, the industry risks stagnation amid automation-driven job losses.
India’s talent pipeline is uneven. Delhi’s graduates are the most employable at 53.4 per cent, yet employability declines across all college tiers. Even in top-tier institutions, only 48.4 per cent of graduates meet industry expectations, highlighting skill gaps despite elite education.
On the bright side, graduates excel in communication (55.1 per cent) and critical thinking (54.6 per cent), skills that align with modern job demands. However, the employability divide across regions and college tiers suggests deeper structural issues in education quality and industry alignment.
The job market faces a widening mismatch—employers seek AI and data analytics expertise, but graduates lack critical non-technical skills like communication and problem-solving. This talent gap makes securing jobs increasingly difficult, even for top-tier graduates.
Despite Tier-I colleges leading in employability at 48.4 per cent, the figures remain underwhelming. Tier-II (46.1 per cent) and Tier-III (43.4 per cent) institutions lag only slightly behind, suggesting that even premium education isn’t a guarantee of job readiness.
