In News:

• The India Skills Report 2026 captures major shifts in India’s workforce, driven by artificial intelligence, digitalisation and evolving hiring practices.
• A significant benchmark highlighted is that women’s employability (54%) has surpassed men’s (51.5%) for the first time in five years, indicating structural shifts in the labour market.
• The overall narrative shows India transitioning towards a skills-first employment ecosystem rather than one centred purely on academic degrees.

About the India Skills Report

• This annual nationwide analysis is prepared by ETS, CII, AICTE, AIU and Taggd.
• It measures workforce readiness, skill gaps and hiring trends across sectors.
• The aim is to help align education, training and industry expectations.
• The report uses extensive surveys of students, graduates and employers to map workforce preparedness.

Overall Employability Trends

The report states that India’s overall employability has risen to 56.35%, up from ~54.8% in the previous cycle. Over a span of four years, employability has grown by nearly 10 percentage points, signalling improved industry alignment, better training models and strengthening digital competencies.

Women Surpass Men in Employability

The report emphasises a key milestone: women’s employability has reached 54%, while men’s is at 51.5%. This improvement is driven by growing female participation in BFSI, education and healthcare, as well as rising opportunities in Tier-2 and Tier-3 cities.

Gender preference data indicates women’s dominant interest in legal jobs (96.4%) and healthcare roles (85.95%), while men prefer graphic design (83.11%) and engineering design (64.67%). This shift reflects both diversification and deepening inclusion in the workforce.

Dominance of Tech and AI Skills

The report highlights strong performance among technical streams, with computer science graduates showing 80% employability and IT engineering graduates at 78%. This dominance is linked to high demand in AI, data analytics, cloud computing, automation and cybersecurity.

Despite improvements, industries continue to face shortages in specialised AI and data skills, demonstrating the need for sustained skilling and curriculum upgrades. The rise of micro-credentials, stackable certificates and project-based training further reinforces the shift toward a skills-first hiring culture.

Rise of the Gig Economy

The gig and freelance workforce has expanded rapidly, with gig hiring increasing by ~38% and gig roles now accounting for around 16% of all jobs. This growth is supported by remote work opportunities, digital platforms and flexible work models. Projections suggest India’s gig labour pool may reach tens of millions by 2030, reshaping traditional employment structures.

Demand for Internships and Practical Training

The report notes that 92.8% of students are actively seeking internships or practical exposure, reflecting the high demand for hands-on industry experience. States like Karnataka, Madhya Pradesh and Tamil Nadu show especially strong internship interest. This trend highlights the necessity of integrating apprenticeships, live projects and experiential learning into mainstream education.

Hiring Intent Across Sectors

Hiring projections are optimistic, with companies planning to increase recruitment by 40%, significantly higher than the previous 29%. The IT sector leads in fresher hiring at 35%, compared to a 14% cross-industry average last year. Pharma and healthcare sectors show heavy recruitment for professionals with 1–5 years of experience, followed by BFSI, manufacturing and FMCG. These patterns reflect ongoing digital transformation and India’s strengthening knowledge economy.

Employability Across Streams

The report provides stream-wise improvements: commerce graduates now show 62.81% employability (up from 55%), science graduates stand at 61%, and arts graduates at 55.55%. Vocational education has shown progress as well, with ITI graduates’ employability rising to 45.95% (from 41%) and polytechnic diploma holders reaching 32.92%. These trends indicate stronger demand for financial, digital and interdisciplinary skills, alongside gradual improvements in vocational skilling.

Opportunities for India

India’s demographic advantage, coupled with rising digital literacy, positions it as a potential global talent supply hub. Strength in computer science, IT and AI opens pathways to indigenous technological development. The increasing employability in Tier-2 and Tier-3 cities may decentralise growth and create new hubs of innovation. Flexible work arrangements, including gig and remote work, allow Indian workers to access global opportunities. Strengthened linkages between industry and academia—through internships and micro-credentials—can further streamline talent pipelines.

Challenges Ahead

Despite progress, access gaps remain. Advanced skilling in AI and data technologies is still concentrated in urban and premier institutions, leaving rural and Tier-3 learners behind. Persistent deficits in soft skills—communication, teamwork and critical thinking-affect job readiness. Curriculum and teaching methods often lag behind rapidly evolving technological requirements. The digital divide limits access to high-speed internet and devices. Dependence on foreign AI tools restricts domestic innovation. Additionally, gig workers face unstable income patterns and lack of social security, creating economic vulnerabilities.

Way Forward

To address these challenges, the report suggests integrating AI, data literacy, sustainability and digital skills into all disciplines. Strengthening ITIs, polytechnics and community-based skilling initiatives is crucial. Expanding blended learning platforms, subsidising devices and improving broadband access can reduce digital inequalities. Industry-linked internships, apprenticeships and project-based learning should be mainstreamed. Faculty upskilling in emerging technologies is necessary to modernise academic delivery. Promoting indigenous AI ecosystems and multilingual digital tools will help India transition from being primarily a user of technology to a creator of intellectual property.