India’s real AI challenge is not technology, but skills recognition

The year 2025 has quietly confirmed a hard truth for India: the race for global competitiveness will not be won by artificial intelligence alone, but by how fast Indian workers can adapt to it. While debates often fixate on AI replacing jobs,

the deeper disruption lies elsewhere-jobs are mutating faster than our systems of education, certification, and hiring can keep up.

Globally, skills required for AI-exposed roles are changing 66 per cent faster than those in less-exposed jobs, according to PwC. India, with its massive and youthful workforce, is particularly exposed to this churn. Degrees, once a near-permanent passport to employment, are losing their signalling power in a labour market where relevance now has a shelf life of just two to three years.

India produces over 1.5 million engineering graduates annually, yet industry surveys consistently show that fewer than half are immediately employable in emerging digital roles. This is not a failure of intelligence or effort-it is a failure of alignment between what people learn, what employers need, and how skills are formally recognised. Encouragingly, Indian workers have already sensed this shift.

India’s Silent Learning Boom

India is witnessing an unprecedented surge in self-driven, online, and modular learning. Enrolments in AI, data science, cybersecurity, and cloud computing have grown sharply across platforms such as Coursera, SWAYAM, and private skilling providers. According to industry estimates, India is now among the top three global markets for online professional learning, with millions of learners upgrading skills alongside full-time jobs.

This signals a major behavioural shift. Learning is no longer remedial-undertaken after job loss-but anticipatory, driven by the fear of obsolescence and the promise of mobility. The government’s Skill India Mission, PMKVY, and the National Education Policy 2020 have laid the groundwork by legitimising lifelong learning and vocational mobility.

Yet a paradox persists. While Indians are acquiring skills faster than ever, employers still rely on outdated markers-degrees, college brands, and years of experience — to judge capability. The result is widespread skill underutilisation, talent mismatch, and slower productivity growth.

The World Economic Forum’s Future of Jobs 2025 report projects that nearly 44-46 per cent of core job skills in India will change by 2030. Traditional credentials were never designed for such velocity. As a result, workers often possess current, job-ready skills that remain invisible to recruiters and institutions.

The Cost of Not Recognising Skills

India’s labour market inefficiencies are not just individual problems; they are macroeconomic constraints. Despite being a global IT powerhouse, India faces persistent shortages in AI engineers, cybersecurity analysts, semiconductor technicians, and green-energy specialists. At the same time, millions of trained youth remain underemployed or stuck in low-productivity roles. This mismatch costs India growth, innovation, and global competitiveness.

LinkedIn’s Economic Graph insights suggest that better skills recognition alone could expand the effective AI talent pool multiple times over by unlocking latent capabilities already present in the workforce. For a country aspiring to be a $5 trillion economy, this is low-hanging fruit.

India has invested heavily in digital public infrastructure-Aadhaar, DigiLocker, UPI, and the Digital Public Stack. Yet skills remain analogue-fragmented across certificates, private platforms, training centres, and informal experience, with no unified, verifiable record.

This gap becomes critical as India positions itself in high-growth sectors: AI, semiconductor manufacturing, renewable energy, defence production, health tech, and digital public services. Without portable and trusted skills recognition, labour mobility across sectors and states will remain constrained.

Towards an Indian Skills Passport

The solution lies not in replacing degrees, but in complementing them with a national digital skills passport-a verified, continuously updated record of an individual’s capabilities.

Such a system would document skills acquired through universities, online platforms, apprenticeships, industry training, and on-the-job experience. Linked to DigiLocker and Aadhaar (with privacy safeguards), it could allow employers to verify competencies in real time, rather than infer them indirectly.

India already has partial building blocks. The National Skills Qualification Framework (NSQF), sector skill councils, and digital credential initiatives exist-but they operate in silos. What is missing is integration and employer adoption.

A skills passport would enable faster hiring, smoother career transitions, and greater confidence among workers to move into emerging fields like AI, climate technologies, and advanced manufacturing. It would also encourage companies to hire based on demonstrated ability rather than pedigree-an essential shift in a country as diverse as India.

The Way Forward: Degrees to Demonstrated Ability

India’s next productivity leap will not come from importing technology, but from unlocking the full value of its human capital. First, India must integrate learning platforms, skilling programmes, and industry certifications into a national digital skills registry, aligned with labour-market demand and updated annually.

Second, public and private employers should be nudged-through policy and procurement norms-to adopt skills-first hiring, reducing over-reliance on degrees.

Third, skilling incentives must shift from enrolment numbers to employment outcomes, ensuring relevance and accountability.

Finally, continuous learning should be financially supported through tax incentives, credit-linked skilling, and employer co-investment.

If the 2010s were India’s decade of digital infrastructure and the 2020s its phase of AI adoption, the 2030s will be defined by how quickly Indians can learn, unlearn, and be recognised for what they know. The real question is no longer whether India has talent-it does. The question is whether India can build a system that sees, trusts, and mobilises that talent at speed.

The writer is Co-Founder and Managing Director of Orane International, a Training Partner with the National Skill Development Corporation (NSDC); views are personal