By Sanjay Fuloria.
Over 15 lakh seats approved for 2025-26. Jobs aligned to graduate skills. Far fewer. And the AI disruption has only just begun.
India is the world’s largest producer of engineering graduates, and 2025-26 will continue that story at scale. According to AICTE, 15.98 lakh B.Tech seats have been approved for the 2025-26 academic session — a 7% rise from the already record-high 14.90 lakh approved in 2024-25. Actual enrolments for 2024-25 already touched 12.53 lakh, the highest in eight years, with vacancy rates falling to a historic low of 16.36%. The number of AICTE-approved engineering institutions, which had been declining since 2020-21, has increased for the first time in six years, now standing at 5,875 colleges.Computer Science and related streams drove most of this surge, with 3,90,245 enrolments in 2024-25 — more than any other branch by a wide margin. AICTE attributes the revival to curriculum revamps and the introduction of courses in Artificial Intelligence, Data Science, Robotics, Cybersecurity, and Green Energy. The shift reflects real market signals. But it also raises a fundamental question: is India producing engineers the market needs?
Table 1: B.Tech Enrolments (2024-25) & Graduate Employability (2026) by Branch *Source: AICTE Annual Report 2024-25 | **India Skills Report 2026 (ETS, CII, AICTE, Taggd)
India’s technology sector — still the primary destination for engineering graduates — delivered a mixed picture in FY2026. According to NASSCOM’s Strategic Review 2026, released in March 2026, the Indian IT industry is projected to reach $315 billion in revenue in FY26, growing 6.1% year-on-year. The sector is expected to add approximately 1,35,000 net new jobs, taking total direct employment to nearly 5.95 million. This is a positive signal — the industry is still a net hirer.
However, the hiring pattern has fundamentally changed. As per NASSCOM, the campus recruitment has declined significantly compared with previous years. The top five IT firms — TCS, Infosys, HCLTech, Wipro, and Tech Mahindra — announced plans to onboard around 82,000 freshers in FY2026, down sharply from the mass campus hiring of earlier years. The shift from volume to value is structural, not cyclical: companies are redesigning workflows around AI, which means fewer but more skilled hires.
Global Capability Centres (GCCs) remain the bright spot. Between 2019 and 2024, GCCs added over 6 lakh jobs in India. Employment is projected to scale to 2.8-4 million by 2030. For FY2026, 47% of GCCs surveyed plan to increase hiring. But GCC roles demand specialist depth — data science, product engineering, R&D — not the general-purpose software skills that most colleges still teach. The math remains stark: even at 1,35,000 net new IT jobs per year, plus absorption across manufacturing, infrastructure, BFSI, and the gig economy, the structured job market cannot absorb 12-15 lakh new engineering graduates annually.
Table 2: Engineering Job Outlook by Sector (FY2025-26) Sources: NASSCOM Strategic Review 2026; India Skills Report 2026; India Macro Indicators FY2026 Analysis
The India Skills Report 2026 — the most comprehensive nationwide assessment of workforce readiness, published in November 2025 by ETS in collaboration with CII, AICTE, AIU and Taggd, based on 1 lakh+ candidate assessments — delivers a nuanced verdict. India’s overall employability climbed to 56.35% in 2026, up from 54.81% in 2025 and just 46.2% in 2022. That upward trajectory is real and worth acknowledging.
But look underneath the headline. Engineering (B.E./B.Tech) graduates recorded 70.15% employability in 2026, down slightly from 71.5% in 2025, as specialisation demands intensify. Computer Science graduates at 80% and IT engineers at 78% are the standouts. The rest of the branches lag. More tellingly, the Mercer-Mettl India Graduate Skill Index 2025, which assessed over 10 lakh learners across 2,700 campuses, found overall graduate employability at just 42.6%, declining from 44.3% in 2023. The divergence between these two reports reflects methodology differences — but both agree on the direction of the problem: soft skills are the weakest link.
An Aspiring Minds benchmarking study found that while 92% of engineering students could correctly explain technical concepts in MCQ format, only 38% could partially write the relevant code, and a mere 4.4% could produce a fully working, efficient program. India’s engineers can describe what to do; far fewer can actually do it. Meanwhile, AI/ML job postings recorded over 600% growth according to the India Skills Report 2026 — yet only 46% of graduates are considered proficient for these roles.
Table 3: Skills Proficiency vs Industry Demand (2025-26) Sources: India Skills Report 2026 (ETS/AICTE/CII); Mercer-Mettl Graduate Skill Index 2025; Aspiring Minds Benchmarking Study
The India Skills Report 2026 identifies Technology, BFSI, Manufacturing, Renewable Energy, and Healthcare as the top five hiring sectors for FY2026-27. Hiring intent rose sharply to 40% of total planned positions being new roles, up from 29% the previous year — a strong signal of expansion. The IT sector alone accounts for 35% of fresher hiring, a significant uptick from the 14% cross-industry average of the prior year.
The most sought-after skills are AI and data analytics, cloud computing, and cybersecurity. These are not optional add-ons. Seventy percent of IT companies and 50% of BFSI firms have now implemented AI in their recruitment processes. The India Skills Report 2026 also flags a significant structural shift: India now holds 16% of global AI talent, projected to reach 1.25 million professionals by 2027. More than 90% of employees across sectors already use Generative AI tools in their work. This means the baseline expectation from a new hire has moved — knowing a programming language is no longer sufficient; working with AI tools effectively is now the minimum bar.
An equally important shift is geographical. Tier-2 and Tier-3 cities — Lucknow, Kochi, Chandigarh, Coimbatore, Nagpur, Vizag — are fast emerging as strong employability hubs. Tier-2 IT hiring grew over 50% in H1 2025, compared to 12-15% in Bengaluru and NCR. Karnataka’s ‘Silicon Beach’ region targets 5,000 IT hires in FY2025-26, with 60-70% reserved for fresh graduates. The talent map is being redrawn. Graduates from smaller cities are no longer at a structural disadvantage.
One more number deserves attention: the gig economy. India’s freelance and gig workforce is projected to reach 23.5 million by 2030, with project-based hiring up 38% last year. Gig and third-party roles already account for 16% of jobs, per the India Skills Report 2026. For engineering graduates who cannot land a full-time role, this is both an opportunity and a warning — the skills needed for gig work (problem-solving, adaptability, communication) are exactly the ones Indian colleges currently underdeliver.
The picture that emerges is not a crisis of numbers — India produces more than enough engineers. It is a crisis of alignment. AICTE has already begun curriculum revamps, mandating integration of AI, machine learning, robotics, and sustainability into all engineering programmes. The NEP 2020 framework promotes experiential, multidisciplinary learning. The Union Budget 2025-26 earmarked Rs 2,000 crore specifically for AI infrastructure and research.
But institutional change at the college level is the real bottleneck. Three things matter most. First, hands-on practice: industry-linked internships from Year 1, live project capstones, and coding labs where students build working software, not just study algorithms. Second, soft-skills integration: communication, critical thinking, teamwork, and leadership need to be woven into every semester, not treated as electives. The India Skills Report 2026 notes that digital fluency and critical thinking are now leading employability indicators, led by Maharashtra (68.23%) and Karnataka (54.83%). Third, faculty upskilling: a teacher who has not used Generative AI cannot prepare students to work in a world where 90% of professionals already do.
India has an extraordinary window. The working-age population is set to rise to 68% of the total by 2030. India now commands 16% of global AI talent. The country’s tech industry is on track to hit $350 billion by 2030. The demographic dividend is real. But dividends are not automatic — they are earned by ensuring that the engineers who graduate in 2025 and 2026 are genuinely equipped for the jobs that exist, not just equipped with degrees.
The author Sanjay Fuloria, Ph.D is the Professor and Director Center for Distance and Online Education at ICFAI Foundation for Higher Education, Hyderabad.
DISCLAIMER: The views expressed are solely of the author and ETEDUCATION does not necessarily subscribe to it. ETEDUCATION will not be responsible for any damage caused to any person or organisation directly or indirectly.
