As Artificial Intelligence makes unprecedented inroads into the global workforce, India’s entry level white collar workers are going to face difficult times ahead, as new study reveals stagnant earnings and high unemployment rate among fresh graduates.
According to the State of Working India 2026 Report, prepared by Azim Premji University, nearly 40% graduates among the 15-to 25-year-olds are unemployed, while 20% graduates among the 25-to-29-year-olds are unemployed. The study also reveals that only a small share secure stable salaried jobs within a year of graduation.
When compared to other countries, In India, youth unemployment is four times non-youth, much higher than global average.
With the advent of AI, the unemployment factor is only getting more complex as it challenges the traditional norms of higher wages associated with more educated, skill based workers.
“Using measures of occupational exposure to AI, Brynjolfsson et al. (2025) find that young workers aged 22–25 in AI-exposed occupations experience a 13 percent relative decline in employment”, read an excerpt from the report.
The report also notes although India witnessed a boom in Industrial Training Institutes (ITIs) over the past two decades, there has also been deterioration in quality education. Additionally, income disparity in India has ensured that privileged Indians have more access to professional fields like engineering and medicine while the poor are more likely to pursue commerce and humanities.
“If college curricula do not adequately equip young workers with the skills required for new forms of entry-level work, employers may increasingly prefer older, more experienced workers over younger entrants,” read an excerpt from the report.
India’s Problem: Too Many Graduates, Not Many Jobs
In India, a total of 367 million people fall in the age group of 15-29 years, marking every fifth young person in the world as an Indian. The report notes from 2004-05 to 2023, India saw 5 million graduates every year although only 2.8 million of them secured jobs every year.
There is apparent gap between graduate qualifications and on-the-job performance as according to India Skills Report 2025, only 55% Indian graduates are employable, with the deficit being particularly acute in specialized domains like IT and Banking, Financial Services, and Insurance (BFSI). According to The 2028 Global Intelligence Report prepared by Citrini Research, by 2028, India’s $200 billion IT services will become obsolete due to AI.
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