Amidst rapidly evolving technologies, the labour-intensive manufacturing sector has a significant opportunity to address the complex issue of unemployment in the country.

To stay globally competitive, the sector has the potential to accommodate the 7-8 million youths entering the labour force annually, as per the ‘India Employment Report 2024’, recently released by the International Labour Organization (ILO) and the Institute for Human Development (IHD).

The report reveals that India’s youth account for almost 83 per cent of the unemployed workforce and the share of youngsters with secondary or higher education in the total unemployed youth has almost doubled from 35.2 per cent in 2000 to 65.7 per cent in 2022. The unemployment rate among youth was six times higher for those with secondary or higher education (18.4 per cent) and nine times higher for graduates (29.1 per cent) compared to those who cannot read and write (3.4 per cent).

The challenge of unemployment is largely due to the skill gap towards the adoption of evolving technologies. The ILO and IHD report warned of the growing uncertainties in the labour market due to rapidly changing technologies, including artificial intelligence (AI), which will significantly impact the labour market.

AI impact

AI presents a significant opportunity to enhance labour productivity and increase the incomes of workers. However, it also cautioned that disadvantaged States are less prepared for this, and active policies and programmes need to be formulated and implemented to skill youths.

A report by Nasscom-Zinnov says that India will face a shortage of 14-19 lakh tech professionals by 2026. By 2026, India is estimated to have 75-78 lakh tech professionals. However, the requirement is being pegged at 93-96 lakh techies.

To bridge this gap, companies must diversify and expand their workforce to include workers with expertise in robotics, the Internet of Things (IoT), AI and analytics. Job openings for roles such as Robot Teaming Coordinators, Smart Factory Managers, Digital Twin Engineers, and Smart Quality Assurance (SQA) Managers are increasingly common. Companies must embrace these changes and take proactive measures to address the skills gap to stay competitive in the market.

Out of the over 50 crore people in the workforce, 92 per cent are in the informal sector. Less than 10 per cent of the workforce has formal vocational training. There is a need to increase the proportion of formally skilled labour to at least 15 per cent of India’s workforce.

The National Skill Development Corporation (NSDC) should collaborate with industries to identify skill gaps. Establishing a District-level Skill Development Plan (DSDP) to create a state-level Skill Development Plan (SSDP) is crucial. The central and state governments must share the financial burden of unskilled workers with employers for the first six months.


Addressing the gap between the demand and supply of skilled workers through on-the-job training (OJT) is essential.

Fostering a culture of continuous learning and upskilling within workforces is essential for maintaining competitiveness.

Employers should provide access to training programmes and resources to enhance individual skill sets and foster adaptability and innovation within the organisation.

In conclusion, it is crucial to have proactive collaboration among stakeholders, make strategic investments in education and training, foster a culture of continuous learning, and promote diversity and inclusion. These factors are all essential in addressing the evolving challenges of the labour-intensive manufacturing sector.

The writer is Co-Founder and MD, Orane International, a training partner with National Skill Development Corporation