Are India’s AI Skill Policies Translating into Real Jobs?

Whether constant upskilling translates into better paying jobs is a pressing question that echoes through boardrooms, campuses, and policy circles across India’s tech and manufacturing landscapes. 

According to the India Skills Report 2026, overall employability has increased steadily from 46.21% in 2020 to 56.35% in 2026. 

The employability data highlights that technical disciplines excel in job readiness. While 80% of computer science graduates are ready for employment,  the figures are 78% for IT, 77% for instrumentation engineering, 75% for electronics and communication, and 63% for mechanical engineering. 

These disciplines are closely linked to emerging roles in AI, automation, and the digital economy, emphasising the importance of targeted skill development.

“Demand for AI, data, cybersecurity and cloud continues to outpace supply,” the report said, mentioning that India’s AI talent base is projected to touch ~1.25 million by 2027. 

According to the report, AI, the gig economy, and freelancing are attracting talent more rapidly than traditional corporate hiring. High-skill sectors are thriving, while generalist and non-technical graduates are falling behind. Moreover, the rate of job creation in AI exceeds the pace at which training produces qualified experts.

From Disruption to Employability

At the Bengaluru Skill Summit (BSS) 2025 on November 6, former secretary of the ministry of skill development and entrepreneurship, Atul Kumar Tiwari, argued that India must harness technological disruption through policy that anticipates the future, rather than reactively chasing it. 

He emphasised that India must both modernise and integrate new technologies into the country’s vast pool of traditional skills. “All these things have to work together so that we are able to harness these disruptive technologies and translate them into scaling and employment opportunities,” he added. 

Mohit Ambani, co-founder at GenAI Startup Unomok, that delivers marketing focused customer engagement, told AIM that AI skilling programs in India are improving, but are yet to produce talent that is fully prepared for the workforce. The majority of training concentrates on theory and not enough on creating practical pipelines, which causes the gap. 

“Learners are rarely exposed to enterprise systems like SAP, core banking, or DMS, and certificates are frequently prioritised over practical problem-solving skills,” he said.

Ambani believes that many are yet to apply AI in real-world business environments. However, progress is being made: government AI hubs are expanding access, large Indian IT companies are retraining thousands in Generative AI, and younger engineers are self-learning rapidly. 

“The true disparity is that while many Indians know AI, very few are able to integrate a RAG agent into an outdated workflow without causing system failures,” he added.

On the ground, this means going beyond textbook instruction and embedding digital instructional tools and experiential formats. Tiwari pointed at the growing wave of technology-driven education, i.e., “We have digital learning platforms… online learning, AI-based credit counselling is there.” Yet, the challenge is not solely in training youth; it lies in training the trainers as well. 

Industry Reality

In the trenches of semiconductor manufacturing and global capability centres (GCCs), the disruption is far more immediate. 

Jitendra Chaddah, country head at GlobalFoundries, warned during the BSS 2025 that AI is fundamentally altering the hierarchy of skills. One of the key transitions that companies need to be prepared for is that more and more decisions are going to be made by machines, he said. 

The once-coveted skills of the tech workforce, especially coding, are no longer scarce. “Coding was a great skill… today a lot of that coding is getting done by the machines.” 

Also, the national picture is sobering. The India Skills Report 2025 showed an overall employability of 54%, and a dire 40%+ among ITI and polytechnic graduates. “The employability gap in terms of AI and engineering skills is very, very low,” Nipun Sharma, CEO of the recruitment platform TeamLease, told AIM. 

Government investment is rising, with ₹60,000 crore allocated for modernising ITIs, but momentum remains slow. As Sharma noted, “There is a gap in what is being taught and what is required by industry.”

The rise of autonomous decision-making and automated development pipelines means the way Indian workers are trained must evolve radically.

Apprenticeships: A Realistic Path to AI-Ready Talent

While universities struggle to keep pace with AI’s 3-45 day technology cycles, industry has found a different route: apprenticeships and work-integrated skilling.

Sharma said that apprenticeships have evolved from compliance to a competitive advantage. “They started seeing many advantages of the apprenticeship scheme… GCCs started hiring graduate engineers as apprentices.”

This approach flips the traditional credential model. Rather than require graduates to be “AI-ready,” companies test potential through aptitude and learnability. 

He highlighted that these programmes provide structured pathways for skill development, with participants earning certificates in six to 12 months, diplomas in two years, and degrees in three years. Skills councils must collaborate with employers to create relevant curricula and with IITs that offer six-month courses in AI or ML.

Benefits of these apprenticeships include increased productivity, reduced hiring time and costs, and improved retention rates. Importantly, apprenticeships often lead to jobs. 

For instance, Sharma cites a German multinational in Bengaluru that offers apprentices stipends and sponsored education, creating a win-win-win situation.

High Tech, Low Readiness

The skills report indicates that project-based hiring in India surged by 38% in FY25, driven by a demand for outcome-focused roles in technology, consulting, and operations.

As global AI spending is projected to rise to the trillion-dollar range by 2030, most large enterprises are moving from pilot projects to full production. Consequently, jobs enhanced by AI tend to see faster earnings growth and expanded career opportunities, while roles less affected by AI tend to see slower advancement and reduced demand, the report said. 

India has policies, subsidies, and institutional ambition. Industry is experimenting with new formats of learning-by-doing. But, the real acceleration happens where all three converge: work-integrated programs, rapid feedback loops, and AI-infused curricula that evolve as fast as the technologies they teach.

We no longer have to worry about whether AI will reshape employment, it already has. We need to rethink whether India’s skilling ecosystem can move fast enough to convert policy into paychecks, training into productivity, and apprentices into full-time AI professionals.

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