India’s Tech Talent Pipeline Faces Emerging Challenges: An In-Depth Analysis from The Register

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India’s tech Hiring Slowdown: AI and shifting Priorities Leave Graduates Scrambling [1] New Delhi – A wave of uncertainty is sweeping across Indian university campuses as a notable slowdown in tech hiring leaves recent graduates, even those from elite institutions, facing a challenging job market.The downturn, fueled by economic headwinds and the rapid advancement of artificial intelligence, is forcing a reevaluation of traditional hiring practices and skill sets.

The disappointment of Expectations

Shubh Kumar, a graduate of the Indian Institute of Technology (IIT) Patna, exemplifies this new reality. He had secured a job offer with a local startup as a software advancement engineer only to have it revoked weeks before his start date, attributed to “significant consolidation” and a “challenging financial position.” Kumar’s experience is far from isolated, reflecting a wider trend impacting students across India’s top engineering colleges.

For decades, a degree from one of India’s 23 iits has been considered a golden ticket to a successful career in the technology sector. Institutions like IIT Delhi, IIT bombay, and IIT Kanpur consistently attract millions of applicants, accepting only a select few. However, the current landscape is disrupting this long-held assumption.

Shifting Demand: From Volume to Value

The country’s leading IT services companies,historically major employers of new graduates,are dramatically scaling back their hiring plans. While thes firms hired approximately 100,000 graduates in fiscal year 2021, projections indicate they will employ only 70,000 by fiscal year 2026. Data from TeamLease reveals a steep decline in overall graduate hiring,plummeting from a peak of 600,000 in fiscal years 2021-2022,to just 150,000 in both 2023 and 2024.

More than half of the IITs experienced a decrease of over 10 percentage points in graduate placement rates between 2021-22 and 2023-24, according to a recent report prepared for India’s Department of higher Education. A Parliamentary Standing Committee has labeled this decline “unusual” and is urging action to improve student employability.

The Rise of AI and Automation

Experts attribute this shift to the increasing impact of artificial intelligence and automation on the IT sector. Routine tasks previously handled by entry-level coders and support staff are now being automated, reducing the demand for large numbers of fresh graduates. According to Neeti Sharma, CEO of TeamLease, “Routine, rules-based roles such as manual testing, basic application support, and low-level coding have been most impacted.”

This trend is not unique to india. Global data indicates a 35 percent decline in entry-level tech roles as January 2024, as reported by Milind Shah, managing director of Randstad Digital india.

However, the demand for specialized skills in areas like artificial intelligence and machine learning is surging, with Randstad’s 2025 Talent Trends Report showing a 39 percent increase in demand for AI/ML roles.

Here’s a comparison of hiring trends:

Year	Hiring by Top 5 IT Firms (approx.)	Total Graduate Hiring (approx.)
FY 21	100,000	600,000
FY 26 (Projected)	70,000	–
2023	–	150,000
2024	–	150,000

The GCC Factor

another significant shift in the Indian tech landscape is the rise of Global Capability Centers (GCCs) – offshore tech teams established by multinational corporations. India is now home to over half of the world’s GCCs,and this number is expected to surpass 2,200 by 2030,representing a $100 billion industry employing 2.8 million peopel.

However, GCCs are currently focused on hiring specialists with proven experience rather than entry-level graduates. “GCCs have been taking baby steps when it comes to fresher hiring,” admits Mohua sengupta, a GCC and IT services leader. This shift reflects a move toward an innovation-driven talent ecosystem, according to industry expert Abhijit Bhaduri.

Adapting to the New Normal

Universities are responding to the changing demands of the industry by incorporating more specialized courses, particularly in AI and machine learning.IIT Delhi, as a notable example, has mandated AI courses for all undergraduate and graduate programs. Companies are also revamping their training programs to equip new hires with the skills they need to succeed.

Tech Mahindra is implementing an AI-powered Upskilling-as-a-Service (UaaS) platform designed to match fresher aspirations and skills with evolving business needs. NASSCOM, the Indian tech industry lobby group, emphasizes the need to scale and skill the nation’s digital talent to maintain a competitive edge.

Did You Know? India is projected to have a tech workforce of 10 million by 2030, with AI possibly generating 2-3 million jobs.

Despite the current challenges, experts remain optimistic about the long-term prospects of India’s tech sector. However, they stress the importance of adapting education and industry practices to ensure a skilled workforce capable of meeting the demands of the future. What steps should India’s education system take to better prepare students for the evolving job market? and how can companies bridge the gap between academic training and industry requirements?

The Future of Work in India

The current situation underscores a broader trend of rapid technological change impacting job markets globally. The ability to adapt, reskill, and embrace lifelong learning will be crucial for individuals and nations alike. A focus on developing soft skills – collaboration, communication, and problem-solving – will also be essential, as these qualities are less susceptible to automation. The key to navigating this landscape lies in proactively addressing the skills gap and fostering a culture of continuous enhancement.