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Startup ecosystem of India is on the verge of experiencing significant growth as the nation strives to enhance its economic development and promote entrepreneurship. However, it is crucial to address the issue of unemployment by generating more job opportunities.
Chandra Garisa, the CEO of Foundit, emphasized the need for further actions to combat the high level of youth unemployment in India. In April, the country’s unemployment rate rose to 8.1%, compared to the previous month’s rate of 7.4%, as reported by the Centre of Monitoring Indian Economy.
The data on employment trends from Foundit revealed a 37% increase in the number of startups in India compared to the previous year, resulting in a 14% rise in job opportunities within the startup sector.
The report also highlighted the IT service sector as the one with the most job openings, with over 50% of new startups jobs being targeted towards recent university graduates.
“We have witnessed a significant surge in startups emerging from India in recent years, and now we have a multitude of startups in various domains,” stated Chandra Garisa, the CEO of Foundit.
India has the talented youth and startups
According to Garisa, India has consistently possessed a remarkable “talent quality.” He mentioned that the availability of capital and the establishment of a collaborative environment between government entities and investors have resulted in a self-sustaining cycle.
This influx of investment has significantly propelled India’s startup sector. Although India’s focus on achieving self-sufficiency in manufacturing and IT has opened up numerous career opportunities for young individuals, Garisa emphasized the necessity of further efforts to address the issue of high youth unemployment in the country.
India has highest youth unemployment
India, the most populous country in the world, boasts the largest population of young people globally. A staggering 83% of all unemployed individuals in India fall within the age range of 15 to 29, as revealed by the “India Employment Report 2024.” The most recent government data indicates that there were 43.3 million university enrollment in fiscal year ending in March 2022.
According to Garisa, due to hiring and profitability pressure, companies have refrained from investing in entry-level talent over the past year. Instead, they prefer to recruit individuals who can be immediately utilized. He further explained that entry-level hiring is not currently at the same level as it was two to three years ago. As long as the macro situation remains somewhat subdued, companies will be hesitant to invest in growth.
Data from Foundit demonstrated a decline in job opportunities within the internet sector by 3%, a 10% decrease in fintech jobs, and an 8% reduction in education-related jobs. This indicates that despite the rise of startups and other companies, challenges such as funding, regulatory issues, and a skills gap still pose obstacles that need to be overcome, as highlighted by recruitment firms.
Need to boost manufacturing jobs
The survey revealed that the manufacturing sector in India experienced a significant increase with job opportunities rising by 31%. This growth can be attributed to the influx of investments in various industries including automobiles, chemicals, pharmaceuticals, and food processing.
Foundit’s CEO Garisa highlighted the thriving manufacturing and production activities activities in sectors like automobile, electronics, and consumer goods. Additionally, there is a growing trend among global companies to adopt a “China plus one” strategy, further contributing to the expansion of manufacturing in India.
In line with this, the Biden administration has been encouraging American companies to relocate their electronics and technology manufacturing operations from China to more favorable countries in the Asia-Pacific region, such as India.
Garisa mentioned that in the past, companies would automatically turn to China for manufacturing, but in the aftermath of the pandemic, India has emerged as the key strategic partner for many organizations. Foundit data revealed a 9% increase in job opportunities within the information technology sector, encompassing both hardware and software, due to increased investments aimed at addressing the country. Garisa emphasized the pivotal role of technology in driving innovation across various industries.
