Indian Graduate Employability Dips, but AI Skills Surge: A Mixed Landscape for Job Seekers

Overall Employability Declines, AI Skills Surge

The latest India's Graduate Skill Index 2025 report by Mercer | Mettl reveals a complex landscape for Indian graduates entering the job market. Overall employability has slightly declined from 44.3% in 2023 to 42.6% in 2024 1

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. However, this decrease is primarily attributed to lower employability in non-technical roles, while technical roles have seen an upward trend.

AI and ML Skills Take Center Stage

Notably, the report highlights a significant improvement in AI and machine learning (ML) skills among Indian graduates. In 2024, 46% of graduates were found to be employable in AI/ML-driven roles, up from 40% in 2023 2

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. This surge in AI proficiency underscores the growing importance of these skills in the job market.

Technical vs. Non-Technical Skills Gap

The study reveals a widening gap between technical and non-technical skills. While technical roles, particularly in AI and ML, have seen improved employability, non-technical roles are struggling to keep pace with evolving industry demands 3

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. This disparity is attributed to the less structured learning path for non-technical skills and the rapid change in employer expectations.

Gender and Institutional Disparities

The report also sheds light on gender-based employability trends. Male graduates show a marginally higher overall employability rate (43.4%) compared to female graduates (41.7%) 1

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. However, women graduates exhibit higher employability in certain non-technical roles, such as digital marketing and human resources 2

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Institutional disparities are evident, with Tier 1 colleges demonstrating the highest employability for both technical and non-technical roles at 48.4%. Tier 2 and Tier 3 colleges show high proficiency in technical roles but lag in non-technical skills 1

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Soft Skills and Adaptability

The importance of soft skills in the AI-augmented job world is emphasized. Indian graduates displayed high employability in communication skills (55.1%), critical thinking (54.6%), and leadership skills (54.2%). However, creativity as a skill lags at 44.3% 2

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. The report stresses the need for graduates to develop adaptability and learning agility to navigate the evolving job landscape.

Industry Outlook and Future Projections

Despite recent challenges in the IT sector, 70% of current Indian college students still aspire to join IT companies 1

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. The report projects that India's AI market will reach $17-22 billion by 2027, growing at a CAGR of 25-35% 1

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. This forecast suggests a continued demand for AI and ML skills in the coming years.

Addressing the Skills Gap

To bridge the employability gap, the report emphasizes the need for closer collaboration between industry and academia. Educational institutions are encouraged to strengthen their curriculum for both technical and non-technical skill development 1

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. Companies are also playing a role in upskilling fresh graduates, with initiatives like ABB's program that trained 2,000 employees on AI in a single day 1

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Regional Variations in Employability

The study highlights regional disparities in graduate employability. Delhi emerges as the strongest region with a 53.4% employability rate, followed by Himachal Pradesh and Punjab at 51.1% 3

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. These regional variations underscore the need for targeted skill development initiatives across different parts of the country.

As the job market continues to evolve, the report underscores the importance of continuous learning and upskilling for Indian graduates. By addressing the challenges highlighted and investing in a well-rounded workforce, India can ensure its graduates are not just job-ready but future-ready in an increasingly AI-driven economy.