Only 1 in 5 Indian youth is AI-skilled: Latest report flags massive opportunity gap

A report supported by Google.org and Asian Development Bank (ADB) has unveiled the major skill gap among Indian youth as the country races to transition to an AI-driven economy. The study reveals that only 1 in 5 young adults in India have participated in AI-skilling programmes, exposing a significant population to the risk of job displacement and missed opportunities in emerging sectors.Titled "AI for All: Building an AI-Ready Workforce in Asia-Pacific", the April 2025 report surveyed 3,000 individuals across 8 Asia-Pacific economies. It identifies Indian youth, especially those aged between 15 to 29, as a key demographic which could benefit from AI skilling. Even as a strong enthusiasm could be witnessed for adapting and learning about AI, participation numbers claim 80% young respondents are yet to enrol in any AI-related training course.

The findings lay bare a stark preparedness gap in a labour market that increasingly prioritises AI fluency, digital decision-making, and automation skills over traditional academic qualifications.

Hiring trends are shifting, but graduates aren't keeping up

India's position is particularly urgent given its large and growing youth population. The report highlights a widening disconnect between industry expectations and the current skillset of young Indian jobseekers.

As workplaces integrate AI across functions, recruiters are placing greater emphasis on practical digital competencies, such as using AI-powered tools for automation, data processing, and workflow optimisation.Yet, much of the youth talent pipeline lacks exposure to such applied skills. The study notes one of last year’s reports; “only 10% of India's 1.5 lakh engineering graduates are likely to be employed in 2024”, pointing to a gap between academic training and workplace readiness.

These hiring patterns threaten to sideline even technically qualified candidates who lack AI literacy.Further, survey insights show that 40% of respondents prefer hands-on training focused on real-world scenarios, an indication that conventional classroom instruction is falling short. The report stresses the need for employment-oriented skilling models that integrate industry tools, user-centric design, and workplace simulations to better align youth capabilities with evolving recruitment benchmarks.

The real barriers run deeper than access

While lack of access to digital infrastructure is a major hurdle, the report identifies deeper structural challenges. One of the most critical is low digital literacy, especially in rural areas and among first-generation learners. In South Asia, which includes India, only 13% of under-25 individuals have home internet access, severely limiting participation in online skilling programmes.In addition to poor connectivity, social and cognitive barriers are limiting uptake.

Women, informal workers, and people from non-urban regions face higher risks of exclusion. The study finds that mature and less digitally fluent individuals are twice as likely to face language-related challenges, and 1.6 times more likely to report concerns about trusting AI systems.Despite the existence of nearly 20,000 AI-focused digital skilling initiatives across the region, only 15% of surveyed respondents have engaged with them, revealing a significant gap between programme availability and awareness or usability.

India still has a chance

Despite the current shortfalls, the report presents a cautiously optimistic path forward. India's demographic edge, defined by its vast youth population, can still be converted into a strategic advantage with timely intervention. The study identifies India as one of the top three Asia-Pacific countries where urgent investment in workforce readiness could deliver outsized returns.The enthusiasm is there; many young Indians express interest in learning AI-related skills.

What's needed now is delivery: skilling models that are modular, application-based, and accessible across languages, literacy levels, and geographies.

India's existing ecosystem of training institutions and public-private skilling partnerships can serve as a launchpad for scalable change. With inclusive design and strategic policy support, the country can not only mitigate risks from AI-driven job disruption, but also build one of the world's most competitive and future-ready workforces.