The government’s Make in India initiative has emerged as a pivotal driver of India’s economic transformation. With strategic flagship policies such as the production-linked incentive scheme and infrastructure advancements, the initiative has significantly bolstered India’s electronic landscape and accelerated the nation’s journey towards self-reliance and global competitiveness. The telecom sector alone has generated approximately 1.3 million jobs, while contributing 15-18 per cent of domestic
value addition.
Several multinational electronics companies are setting up production hubs in India. For example, Foxconn is establishing a $2.7 billion iPhone assembly plant in Karnataka and a $0.6 billion facility in Telangana, while companies such as Motorola and Xiaomi have partnered with Dixon Technologies for smartphone assembly. This growing ecosystem is expected to add 250,000 jobs in smartphone contract manufacturing alone
by 2025.
To cater to the demand for a skilled workforce, the government has taken a number of initiatives over the years. The Pradhan Mantri Kaushal Vikas Yojana has formulated contemporary courses for Industry 4.0 (covering subjects such as coding, AI, robotics, mechatronics, IoT, 3D printing and drones). It is also offering vocational training to youth under the Craftsman Training Scheme. Skill India Digital Hub (SIDH) and Future Skills PRIME are also noteworthy initiatives in the digital skilling space. For instance, since its launch in September 2023, SIDH has registered over 10 million users. Further, the 2024-25 union budget had five schemes/initiatives to promote employment and skilling opportunities for 41 million youth in the country over a five-year period. Recently, the Ministry of Skill Development and Entrepreneurship partnered with Meta to launch an AI assistant for the Skill India Mission, alongside establishing five centres of excellence in virtual and mixed reality to improve the learner experience by offering personalised learning.
Despite these strides, the alignment of skill development with industry demands remains a critical challenge. India’s employment-to-population ratio is 53.4 per cent, significantly lower than several other nations. Leading the list is Qatar with an impressive 88.8 per cent, followed by Madagascar at 83.6 per cent and Solomon Islands at 83.1 per cent. The United Arab Emirates (UAE) stands at 80.2 per cent, and Tanzania follows closely at 79.3 per cent. Even nations such as the US and the UK have higher ratios at 59.6 per cent, while Canada (61.7 per cent), Australia (64 per cent) and New Zealand (69.4 per cent) are also outperforming India. Further, the World Bank’s South Asia Development Report points out that the shift towards non-agricultural sectors in India has been slower than in Bangladesh, Bhutan, Sri Lanka and Nepal. This stark contrast highlights the challenges India faces in leveraging its demographic dividend effectively, emphasising the urgent need for targeted skill development and job creation strategies to improve labour
market participation.
Further, there is a significant gap between skill training and employability. The Pradhan Mantri Kaushal Vikas Yojana has trained 14.8 million individuals since 2015 (till July 30, 2024), but placement rates remain a concern. Out of 568.8 million candidates certified under short-term training, only 42.8 per cent of candidates have been placed. Similarly, the SIDH has only created 1.2 million
total opportunities.
Furthermore, according to a report by the Indian Institute of Foreign Trade, the semiconductor industry is grappling with a global shortage of skilled talent. While India produces over 800,000 engineering graduates annually, a significant gap remains between academic training and industry requirements. Only a small fraction of these graduates are truly prepared to meet the demands of advanced sectors such as semiconductors. This highlights a critical need for improved educational curricula, specialised courses and hands-on training programmes to better equip graduates with the practical skills and industry-specific knowledge needed to thrive in these high-tech fields.
The rise of the gig economy presents another challenge. While it provides flexibility, gig work often lacks long-term security, benefits and consistent income. Many gig workers, especially in industries such as delivery and transportation, are excluded from the formal economy and do not have access to social security or labour rights protections. This precarious work environment can lead to low job satisfaction and poor quality of life, underlining the need for reforms that balance flexibility with better protections for workers.
Future outlook
India’s ambition to become the world’s third-largest economy hinges on robust skill development aligned with its economic goals. According to NITI Aayog, the nation aims to achieve $500 billion in electronics manufacturing by 2029-30. This growth is expected to generate 5.5 to 6 million jobs, significantly enhancing employment opportunities. With targeted interventions, including better alignment of skill development programmes with industry needs, India can address current challenges and strengthen its workforce readiness. By focusing on high-value manufacturing and ensuring inclusivity in job creation, Make in India can sustain its momentum as a transformative force in India’s economic journey.