India’s technology sector will need more than 1 million engineers with advanced skills in artificial intelligence and other capabilities over the next 2-3 years, an industry body estimates, a demand that won’t be met unless the government significantly beefs up education and training in the country.

The sector will need to reskill more than half of its existing workforce to take up jobs in fields such as AI, big data analytics and cyber-security, said Sangeeta Gupta, senior vice president and chief strategy officer at the National Association of Software and Service Companies, based in Bengaluru. New college graduates will only be able to fill a quarter of the advanced tech jobs needed, she said.

“Employability of the workforce is a huge challenge and will require a fair amount of work,” Gupta said in an interview Monday. “The industry can’t do with a one-time up-skilling, it has to be a continuous journey amid a fast changing digital landscape.”

India’s $250 billion tech sector plays an important role in the economy, employing about 5.4 million people. Tech services make up about 7.5 per cent of the country’s $3 trillion-plus gross domestic product.
IT businesses like Tata Consultancy Services Ltd. are struggling to fill positions because of a wide mismatch between the skills of the workforce and what they need on the job. That threatens to put Indian IT companies at a disadvantage against global rivals such as International Business Machines Corp. and Accenture Plc.

TCS said last month it’s unable to fill 80,000 jobs because of the skills gap. It’s also doubled the number of its employees trained on AI in the fiscal year that ended in March. Larsen & Toubro Ltd., India’s largest engineering and construction firm, said in June its IT and IT-enabled services unit has a shortage of 20,000 engineers.

Gupta said the root of India’s skill gap lies with the country’s poor schooling system, from lower grades to high school. Colleges don’t provide students with enough practical skills, which are essential for the job market, she said.

Nasscom estimates the demand supply gap for digital talent is expected to widen from the current 25 per cent to about 29 per cent in 2028.

The comments underscore warnings from well-known economists like former central bank Governor Raghuram Rajan, who say India’s poor schooling will hinder growth prospects in a country where more than half of the 1.4 billion population are below the age of 30. A recent report from the International Labour Organisation estimates that higher educated young people are more likely to be unemployed than those without any schooling.