An industry association projects that over the next two to three years, India's technology sector will require more than a million engineers with advanced skills in artificial intelligence and other capabilities. This demand cannot be reached unless the government notably increases education and training in the nation.

According to Sangeeta Gupta, senior vice president and chief strategy officer at the National Association of Software and Service Companies, based in Bengaluru, the industry will need to reskill more than half of its current workforce in order to fill positions in industries like artificial intelligence, big data analytics, and cyber-security. Only 25% of sophisticated tech positions will be filled by recent college grads, she said.

In an interview on Monday, Gupta stated, "The workforce's employability is a huge challenge and will require a fair amount of work." "The industry needs to upskill continuously in the face of a rapidly changing digital landscape; it cannot afford to do so all at once."

With a $250 billion GDP, India's IT industry contributes significantly to the country's employment rate of 5.4 million. Roughly 7.5% of the GDP of the nation, which exceeds $3 trillion, is made up of IT services.

Due to a significant mismatch in the capabilities of the workforce and what employers want, IT companies such as Tata Consultancy Services Ltd. are having trouble filling vacancies. This might potentially harm Indian IT firms in the face of international competitors like Accenture Plc and International Business Machines Corp.

TCS stated last month that the skills gap is preventing them from filling 80,000 positions. In the fiscal year that concluded in March, it also increased the number of its staff members who received AI training. The largest engineering and construction company in India, Larsen & Toubro Ltd., said in June that it is short-staffed with 20,000 engineers in its IT and IT-enabled services division.

According to Gupta, India's subpar educational system, which extends from elementary to high school, is the main cause of the country's talent gap. She claimed that not enough practical skills, which are necessary for the labor market, are taught in colleges.

According to Nasscom, by 2028, the gap between supply and demand for digital skills should have widened from the present 25% to around 29%.

The remarks support the concerns of prominent economists such as former governor of the central bank Raghuram Rajan, who assert that inadequate education in India would impede economic possibilities in a nation where over half of the 1.4 billion people live below the age of thirty. According to a recent International Labour Organization research, young individuals with greater levels of education have a higher unemployment rate than those with lower levels of education.