India wants manufacturing to become a much larger engine of growth, exports and employment and to move up global supply chains in electronics, automobiles, machinery, textiles, pharmaceuticals and clean-energy equipment. Production-linked incentives, industrial corridors, logistics investment and efforts to attract global manufacturers all point in the same direction. But factories need more than land, power and capital. They need people who can operate machines, read engineering drawings, work with industrial software, install and maintain electrical systems, run quality-control processes and increasingly handle automation and advanced electronics. But while India has a very large labour force, it has a small pool of formally trained workers.
While a lot of companies, especially in the engineering sector, have their own skill development programmes, these are too small to make a national impact. The 2025 Periodic Labour Force Survey shows that only 4.9% of Indians aged 15-29 had received formal vocational or technical training. Another 21.2% had acquired skills through informal sources. Formal vocational training reaches only a small minority. Of course, India claims to have trained very large numbers. By June 2026, the government's major skill-development programmes reported cumulative participation of 16.5mn (million) under Pradhan Mantri Kaushal Vikas Yojana (PMKVY), 3.66mn under Jan Shikshan Sansthan, 5.3mn under National Apprenticeship Promotion Scheme (NAPS) and 10.7mn through Industrial Training Institutes (ITI) under the Craftsman Training Scheme.
Adding those numbers would produce more than 32mn programme participations. But they are not 32mn uniquely skilled workers. The schemes cover different activities, periods and categories, and apprenticeships are not equivalent to a permanent skill qualification. The more important question is what happens after training: whether the worker can perform a productive job, whether an employer recognises the qualification and whether the skill matches what a particular factory actually needs. Consider automobiles, one of the country's largest manufacturing industries. National Council of Applied Economic Research (NCAER)’s recent work, based on consultations with industry, found shortages across conventional occupations as well as new ones. Firms reported difficulty finding CNC and machine operators, technicians and mechanics. The skills required by a modern automobile factory (electronics, embedded software, automation, artificial intelligence and cybersecurity) are therefore changing even as India is trying to expand its manufacturing workforce.
What should be done? As always, it is good to learn from China and other Asian tigers who have set the gold standard for rapid industrialisation, which is impossible without rapid skill development. China’s initial response to its skills problem after the 1978 'opening up and reform' started was direct: it changed the structure of education to match the needs of an industrialising economy. In 1978, vocational students accounted for just 7.6% of students at the senior-secondary level. The 1985 education reform made the expansion of vocational education a central objective, seeking to build a system of technical education from basic to advanced levels and linked to different industries. By 1990, vocational students actually outnumbered those in general senior secondary schools. China's approach was to build vocational capacity alongside industrialisation. Between 2012 and 2021, according to China's ministry of education, its vocational institutions produced 61 million skilled professionals.
Most importantly, as industries changed, it changed the courses. More than 1,000 vocational disciplines were added or upgraded while 108 outdated ones were phased out. In advanced manufacturing, emerging industries and information technology-enabled services, the ministry says more than 70% of new frontline workers were vocational-school graduates. Then there was the institutional connection with employers. China reported more than 1,500 vocational-education alliances, collaboration between vocational schools and about 3,000 enterprises, nearly 24,900 school-enterprise training centres, and more than 1,000 modern apprenticeship programmes. This educational response to industries’ needs has become institutionalised and continues smoothly. When a low-altitude economy started to look like a reality, in 2025 alone six universities established degree courses in 'low-altitude technology and engineering'.
Taiwan's experience is particularly relevant to India's manufacturing aspiration because vocational education evolved alongside industrialisation. Its system was repeatedly adjusted as the economy moved from labour-intensive production towards capital- and technology-intensive industries. Vocational curricula were designed using analysis of industry requirements, while more recent programmes have strengthened cooperation between vocational schools, technical universities and companies. Vietnam, too, has been trying to tie vocational education more closely to enterprises and the labour market. Its 2021-30 vocational-education strategy explicitly calls for stronger links between vocational institutions, businesses and labour-market requirements.
All these countries created mechanisms through which changes in industrial structure could feed back into what schools taught and what companies trained. That is the missing link India needs to strengthen. India has Sector Skill Councils, ITIs, apprenticeships, PMKVY and an expanding network of industry-linked programmes. The government is also attempting to upgrade 1,000 ITIs and introduce future-skill courses. Apprenticeships are particularly important because they put training inside the workplace. Yet the Economic Survey 2025-26 notes that only about 6,100 enterprises were actively engaged in apprenticeship training in FY26, with 9.9 lakh apprentices enrolled.
To make any serious impact, this array of programmes requires continuous industry-training feedback loops: identify the factories and technologies India wants to attract; forecast the occupations they will require; define the competencies; redesign curricula; train workers; put them into factories through apprenticeships; measure employment, wages and productivity; and then change the curriculum again. China, Korea, Taiwan and Vietnam have all built versions of that loop. Until India does the same, billions will be wasted in the name of 'skill development' and India’s manufacturing dream will remain just that – a dream.
(This article first appeared in Business Standard newspaper)
India has these 3 problems for working class.
1) People do not want to work.
2) People who want to work do not have Work.
3) People who have work do not know how to work.
3)
India has some unique challenges in this regard. Educational reforms are guided here by different factors; it is a concurrent subject and hence the State governments have their own say and that need not be in tune with the views and concepts of the Union government. Then comes the funding part. Governments may expect the industries to foot the bill. Industries may look up to the government, to take care of the entire funding requirement. The role of the Industry confederations is very important. Basically they have to make the survey and highlight the requirement instead of expecting the bureaucracy to act. Identifying the needs is the first and most important step. This cannot be left to the government. But as the future developments in industrial growth depends on government priorities and policies, the Industries cannot project their demands without a knowledge of government thinking about future growth areas. That poses a question whether the government has a clear vision about developments or not. And who is responsible for formulating vision in the government? Simply put - who will bell the cat?
China has a thumb rule for labours and manufacturing sector. Indians can't even think of the level of interest along with hardwork these employees do in manufacturing sector in china.Even if we attain 10% of manufacturing done in china in the next 5 years it will be a big achievement.
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1) People do not want to work.
2) People who want to work do not have Work.
3) People who have work do not know how to work.
3)