Mumbai (Economy India): India’s labour market is poised for a significant shift over the next two years, with youth employment expected to rise by nearly 11% by 2026, driven primarily by rapid hiring in IT services, fintech, and green energy sectors, according to a new report by global digital talent solutions provider NLB Services.
The report estimates that these high-growth sectors alone could generate approximately 12.8 million new jobs, positioning India’s young workforce at the centre of the country’s digital and sustainability-driven economic transformation. However, it also cautions that realising this employment potential will depend heavily on the availability of AI-skilled and future-ready talent.
Structural Shift in India’s Youth Employment Landscape
India is home to one of the world’s youngest workforces, with more than 65% of its population under the age of 35. Over the past decade, the nature of employment opportunities for this demographic has undergone a fundamental change—from traditional manufacturing and services to technology-led, knowledge-intensive roles.
NLB Services noted that the projected 11% increase in youth hiring reflects:
- Accelerated digitalisation across industries
- Rapid expansion of technology-driven services
- Strong government push towards green and sustainable growth
- Increased adoption of automation, AI, and data-driven decision-making
“The demand is no longer just for manpower, but for skilled, adaptable, and digitally fluent professionals,” the report said.
IT Services to Remain the Largest Job Creator
The IT services sector is expected to remain the single largest contributor to youth employment growth. Despite global economic uncertainty, Indian IT firms continue to invest in:
- Cloud computing
- Artificial intelligence and machine learning
- Cybersecurity
- Data analytics
- Enterprise digital transformation
With global enterprises increasing their reliance on offshore digital services, India’s IT sector is projected to add millions of entry- and mid-level jobs by 2026.
However, hiring patterns are evolving. Employers are increasingly prioritising multi-skilled professionals who can work across technologies rather than narrow specialisations.
Fintech Hiring Accelerates on Digital Adoption
India’s fintech ecosystem, one of the fastest-growing globally, is expected to be a major source of youth employment. Rising adoption of:
- Digital payments
- Online lending platforms
- Embedded finance
- Blockchain-based solutions
has sharply increased demand for technology, risk, compliance, and product talent.
The report highlights that fintech firms are not only hiring engineers but also professionals with hybrid skills spanning technology, finance, and regulatory understanding.
Green Energy Emerges as a New Employment Engine
One of the most notable findings of the NLB Services report is the emergence of green energy as a significant employment generator for young professionals.
India’s ambitious renewable energy targets, electric mobility push, and decarbonisation commitments are driving hiring in areas such as:
- Solar and wind energy projects
- Green hydrogen
- Electric vehicle infrastructure
- Energy storage systems
- Sustainability analytics and ESG compliance
The report notes that green energy jobs increasingly require a blend of engineering expertise, digital skills, and sustainability knowledge, making workforce readiness a key challenge.
AI and Future Skills: The Defining Factor
While job creation prospects appear strong, the report warns of a potential skills mismatch. Employers across sectors are facing difficulty in sourcing talent with capabilities in:
- Artificial intelligence and machine learning
- Automation and robotics
- Data science and analytics
- Cloud-native development
- Cybersecurity
“AI skills are rapidly becoming a baseline requirement rather than a niche capability,” the report said, adding that organisations that fail to invest in upskilling risk productivity bottlenecks.
Employers Shift Focus to Skills Over Degrees
Another emerging trend highlighted in the report is the gradual shift from degree-based hiring to skills-based recruitment. Companies are increasingly open to hiring candidates who demonstrate practical competencies through certifications, projects, and hands-on experience.
This shift could potentially widen access to employment opportunities for youth from non-traditional educational backgrounds, provided they possess in-demand skills.
Role of Upskilling and Reskilling
NLB Services emphasised that sustained youth employment growth will require:
- Strong collaboration between industry and academia
- Large-scale upskilling and reskilling programmes
- Corporate investment in continuous learning
- Government-supported skilling initiatives aligned with future technologies
Without systematic skill development, the report warns that India risks underutilising its demographic advantage.
Macroeconomic Implications
An 11% rise in youth employment could have far-reaching economic implications, including:
- Higher household incomes and consumption
- Improved labour force participation
- Strengthened digital and green economy foundations
- Greater social stability through job creation
Economists note that productive employment for young workers is critical for sustaining India’s long-term growth trajectory.
Challenges That Could Impact Hiring Momentum
Despite the positive outlook, the report identifies potential risks:
- Global economic slowdown impacting IT exports
- Rapid technological change outpacing workforce readiness
- Regional disparities in skill availability
- Uneven access to quality training infrastructure
Addressing these challenges will be essential to convert job projections into actual employment outcomes.
Opportunity with Responsibility
Looking ahead to 2026, the report concludes that India stands at a decisive moment. The opportunity to generate over 12.8 million jobs for young professionals exists—but success will depend on how effectively stakeholders align education, skills, technology, and industry demand.
As India transitions towards a digital and sustainable economy, youth employment will increasingly be shaped not by quantity alone, but by quality, adaptability, and future relevance of skills.
(Economy India)
