Structure and “five pillars” of the TVET system
Since the late 2000s, India’s skills landscape has expanded from a relatively narrow base of publicly funded Industrial Training Institutes (ITIs) into a complex architecture that can be described in terms of five main pillars.
Despite this apparent expansion, only a small fraction of the workforce has received formal vocational training, and most skills acquisition continues to occur informally on the job, particularly in the informal sector, which accounts for the vast majority (85%) of enterprises. This reveals a fundamental disconnect: India's TVET system remains predominantly state-led and supply-driven, unlike successful international models emphasizing employer provision and demand-driven delivery.
Fragmentation, quality and governance challenges
The rapid growth of private provision and short-term schemes has generated serious concerns about quality assurance and labour market relevance. Many NSDC-supported providers and private ITIs operate as standalone training entities with weak employer linkages, and available evidence suggests that placement outcomes for short-duration courses often fall short of expectations.
System governance is highly fragmented. Multiple ministries run parallel programmes with limited coordination, and the five pillars of TVET frequently operate in institutional silos. This fragmentation complicates the creation of coherent qualification pathways, hampers recognition of prior learning, and contributes to overlapping responsibilities and inefficiencies – despite the existence of a National Skills Qualification Framework, inspired by an Anglo-Saxon initiative that has gained global popularity in over 100 countries, the results have been varied.
Apprenticeships and work-based learning
Reforms to the apprenticeship system since 2014, including more flexible quotas, employer-defined curricula and streamlined online procedures, have led to a substantial increase in registered apprentices and participating firms. Third-party aggregators now support micro, small and medium enterprises in managing recruitment and administrative tasks, which has helped broaden participation beyond large employers.
Nevertheless, apprenticeships largely remain a parallel track rather than an integrated component of core TVET programmes. Graduates often accumulate separate qualifications for institutional training and apprenticeship experience, which limits the cumulative value of credentials and falls short of integrated dual-system models where work-based learning is central to certification.
Labour market outcomes and productivity
Persistent mismatches between training provision and labour demand have contributed to a crisis of confidence in mass TVET. A growing number of TVET graduates struggle to secure stable, adequately remunerated employment, while the proliferation of short-term certificates has contributed to credential inflation and uncertainty among employers about the value of specific qualifications.
Earnings data underscore the gap between policy narratives and labour market realities. Self-employed workers, who are often highlighted as “job creators” in policy discourse, typically earn substantially less on average than regular wage employees, and survey evidence suggests that young people strongly prefer formal, regular employment over self-employment. Self-employment has increased significantly from 53 to 58% of the workforce, representing one of the most vulnerable forms of employment and not a career path that is typically chosen for its long-term professional development. At the same time, systematic information on the productivity and economic returns associated with different TVET programmes remains limited, and performance measurement is still oriented more towards enrolment and completion volumes than towards labour market outcomes. It is essential that India provides systematic support for independent research on the outcomes of TVET programmes.
Since the late 2000s, India’s skills landscape has expanded from a relatively narrow base of publicly funded Industrial Training Institutes (ITIs) into a complex architecture that can be described in terms of five main pillars.
- Vocational education streams in schools and higher education institutions, introduced in the 2010s under the education ministry, provide curriculum-based pathways mainly at ISCED level 3 and above.
- The National Skill Development Corporation (NSDC) coordinates a large network of private training providers offering short-term courses, typically of about three months’ duration at lower secondary or upper secondary levels.
- Public and private ITIs, supervised by the Ministry of Skill Development and Entrepreneurship, have expanded rapidly, with private ITIs growing from fewer than 2,000 a decade ago to more than 13,000 by the early 2020s.
- Multiple central government ministries (around 16) operate their own short-term sectoral schemes, adding further supply channels for skills training.
- A national apprenticeship system, originating from the 1961 Apprentices Act and reformed in the mid‑2010s, provides structured work-based learning opportunities in the organised sector.
Despite this apparent expansion, only a small fraction of the workforce has received formal vocational training, and most skills acquisition continues to occur informally on the job, particularly in the informal sector, which accounts for the vast majority (85%) of enterprises. This reveals a fundamental disconnect: India's TVET system remains predominantly state-led and supply-driven, unlike successful international models emphasizing employer provision and demand-driven delivery.
Fragmentation, quality and governance challenges
The rapid growth of private provision and short-term schemes has generated serious concerns about quality assurance and labour market relevance. Many NSDC-supported providers and private ITIs operate as standalone training entities with weak employer linkages, and available evidence suggests that placement outcomes for short-duration courses often fall short of expectations.
System governance is highly fragmented. Multiple ministries run parallel programmes with limited coordination, and the five pillars of TVET frequently operate in institutional silos. This fragmentation complicates the creation of coherent qualification pathways, hampers recognition of prior learning, and contributes to overlapping responsibilities and inefficiencies – despite the existence of a National Skills Qualification Framework, inspired by an Anglo-Saxon initiative that has gained global popularity in over 100 countries, the results have been varied.
Apprenticeships and work-based learning
Reforms to the apprenticeship system since 2014, including more flexible quotas, employer-defined curricula and streamlined online procedures, have led to a substantial increase in registered apprentices and participating firms. Third-party aggregators now support micro, small and medium enterprises in managing recruitment and administrative tasks, which has helped broaden participation beyond large employers.
Nevertheless, apprenticeships largely remain a parallel track rather than an integrated component of core TVET programmes. Graduates often accumulate separate qualifications for institutional training and apprenticeship experience, which limits the cumulative value of credentials and falls short of integrated dual-system models where work-based learning is central to certification.
Labour market outcomes and productivity
Persistent mismatches between training provision and labour demand have contributed to a crisis of confidence in mass TVET. A growing number of TVET graduates struggle to secure stable, adequately remunerated employment, while the proliferation of short-term certificates has contributed to credential inflation and uncertainty among employers about the value of specific qualifications.
Earnings data underscore the gap between policy narratives and labour market realities. Self-employed workers, who are often highlighted as “job creators” in policy discourse, typically earn substantially less on average than regular wage employees, and survey evidence suggests that young people strongly prefer formal, regular employment over self-employment. Self-employment has increased significantly from 53 to 58% of the workforce, representing one of the most vulnerable forms of employment and not a career path that is typically chosen for its long-term professional development. At the same time, systematic information on the productivity and economic returns associated with different TVET programmes remains limited, and performance measurement is still oriented more towards enrolment and completion volumes than towards labour market outcomes. It is essential that India provides systematic support for independent research on the outcomes of TVET programmes.
India’s TVET System: Historical Legacies, Structural Challenges, and Reform Opportunities
CERE TrendWatch: Volume 2025, Issue 3
CERE TrendWatch is a series publishing concise analytical notes with infographics on key themes in education and skills development across emerging economies. Each issue spotlights major trends and policy insights to inform research and decision-making.
CERE TrendWatch is a series publishing concise analytical notes with infographics on key themes in education and skills development across emerging economies. Each issue spotlights major trends and policy insights to inform research and decision-making.
Author: Santosh Mehrotra
Visiting Professor, Centre for Development Studies, University of Bath
Visiting Professor, Centre for Development Studies, University of Bath
Historical Context and institutional Context
India’s TVET system has developed against the backdrop of a long colonial period that left the country with very low human capital indicators at independence, including literacy of around 18% and life expectancy of about 32 years in 1950. Early post-independence strategies prioritised heavy industry, import-substitution and higher education, while school education as well as vocational training within it remained marginal in policy and financing, resulting in very low formal TVET coverage in the workforce for decades.
By the early 2000s, only about 2% of workers had received formal vocational training, and this share had increased to just under 7% by the early 2020s, despite the emergence of globally competitive elite technical institutions. At the same time, deep social stratification, rooted in caste and reproduced through the education system, has contributed to a segmented labour market with a small formal sector and a large informal economy, within which a substantial share of workers have low levels of education in the non-farm sector, with a large illiterate adult population mainly in farming.
India’s TVET system has developed against the backdrop of a long colonial period that left the country with very low human capital indicators at independence, including literacy of around 18% and life expectancy of about 32 years in 1950. Early post-independence strategies prioritised heavy industry, import-substitution and higher education, while school education as well as vocational training within it remained marginal in policy and financing, resulting in very low formal TVET coverage in the workforce for decades.
By the early 2000s, only about 2% of workers had received formal vocational training, and this share had increased to just under 7% by the early 2020s, despite the emergence of globally competitive elite technical institutions. At the same time, deep social stratification, rooted in caste and reproduced through the education system, has contributed to a segmented labour market with a small formal sector and a large informal economy, within which a substantial share of workers have low levels of education in the non-farm sector, with a large illiterate adult population mainly in farming.
Demography, employment and the education–unemployment paradox
India’s population structure, with nearly two thirds under the age of 35, provides a potential demographic dividend that is expected to peak and end around 2040. However, slowing non-farm job creation since the mid-2010s and rising unemployment among educated youth indicate that this opportunity is at risk of being underutilised.
Two trends are particularly significant for TVET. First, there has been a large recent increase—on the order of tens of millions—in the number of people working in agriculture, signalling a re-absorption of labour back into low-productivity activities rather than a shift towards formal, skill-intensive employment. Second, unemployment rates are higher among those with vocational, technical training and higher education than among workers with only primary or secondary education, producing an “inverted” education–unemployment curve that points to structural labour market and employability challenges. However, this inversion is typical to developing countries.
India’s population structure, with nearly two thirds under the age of 35, provides a potential demographic dividend that is expected to peak and end around 2040. However, slowing non-farm job creation since the mid-2010s and rising unemployment among educated youth indicate that this opportunity is at risk of being underutilised.
Two trends are particularly significant for TVET. First, there has been a large recent increase—on the order of tens of millions—in the number of people working in agriculture, signalling a re-absorption of labour back into low-productivity activities rather than a shift towards formal, skill-intensive employment. Second, unemployment rates are higher among those with vocational, technical training and higher education than among workers with only primary or secondary education, producing an “inverted” education–unemployment curve that points to structural labour market and employability challenges. However, this inversion is typical to developing countries.
The third issue of CERE TrendWatch examines the evolution of India’s technical and vocational education and training (TVET) system, situating it within the country’s post-colonial development trajectory and highly segmented labour market. The analysis emphasises how institutional legacies, demographic pressures and fragmented governance structures shape current outcomes and reform prospects.
Policy implications and reform directions
Analysis of India’s TVET system points to a set of interrelated structural issues: a predominantly state-financed and supply-driven model, weak employer co-financing, fragmented institutional arrangements and shortages of instructors with recent industry experience. Addressing these issues requires shifting towards more demand-driven governance, stronger employer ownership of training content and finance, and clearer integration between institutional and work-based learning.
Priority reform areas include:
Given current ambitions to expand higher education participation, policies also need to consider the implications of rapid university growth for quality, employability and the balance between academic and vocational routes. In this context, repositioning TVET as a high-quality, employment-oriented pathway and reallocating part of future expansion towards vocational programmes could be central to leveraging India’s remaining demographic window for inclusive and productivity-enhancing growth.
Conclusion
India’s TVET system stands at a critical juncture: a historically underdeveloped but rapidly expanding, multi-pillar architecture must now be reoriented from state-led, supply-driven provision towards employer-engaged, demand-driven skills development if it is to deliver on the country’s demographic opportunity.
The evidence reviewed in this issue highlights persistent gaps in quality, coordination and labour market alignment, including fragmented governance across institutional silos, weak integration of apprenticeships with core training, limited recognition of informally acquired skills and a continued emphasis on higher education despite modest employment returns. Overcoming these structural constraints will require substantial increases in public and employer co-financing, systematic integration of work-based learning into certification, and robust outcome-focused measurement of productivity and employability. If such reforms are implemented within the remaining demographic window, India’s TVET system can evolve from a marginal, low-aspiration segment into a central driver of inclusive growth; if not, the risks include deepening youth underemployment and a missed opportunity to translate human capital investments into sustained economic transformation.
Analysis of India’s TVET system points to a set of interrelated structural issues: a predominantly state-financed and supply-driven model, weak employer co-financing, fragmented institutional arrangements and shortages of instructors with recent industry experience. Addressing these issues requires shifting towards more demand-driven governance, stronger employer ownership of training content and finance, and clearer integration between institutional and work-based learning.
Priority reform areas include:
- Expanding high-quality adult literacy and foundational skills programmes, particularly for agricultural and informal sector workers, to support productivity gains alongside vocational training.
- Strengthening Recognition of Prior Learning through independent assessment bodies and transparent national standards, so that skills acquired informally can be credibly certified.
- Introducing or scaling sectoral levy-type financing mechanisms that align enterprise incentives with national skills objectives and reduce free-rider problems in training investment.
- Integrating apprenticeships more systematically into TVET curricula, so that work-based learning contributes directly to final qualifications rather than operating as a separate track.
Given current ambitions to expand higher education participation, policies also need to consider the implications of rapid university growth for quality, employability and the balance between academic and vocational routes. In this context, repositioning TVET as a high-quality, employment-oriented pathway and reallocating part of future expansion towards vocational programmes could be central to leveraging India’s remaining demographic window for inclusive and productivity-enhancing growth.
Conclusion
India’s TVET system stands at a critical juncture: a historically underdeveloped but rapidly expanding, multi-pillar architecture must now be reoriented from state-led, supply-driven provision towards employer-engaged, demand-driven skills development if it is to deliver on the country’s demographic opportunity.
The evidence reviewed in this issue highlights persistent gaps in quality, coordination and labour market alignment, including fragmented governance across institutional silos, weak integration of apprenticeships with core training, limited recognition of informally acquired skills and a continued emphasis on higher education despite modest employment returns. Overcoming these structural constraints will require substantial increases in public and employer co-financing, systematic integration of work-based learning into certification, and robust outcome-focused measurement of productivity and employability. If such reforms are implemented within the remaining demographic window, India’s TVET system can evolve from a marginal, low-aspiration segment into a central driver of inclusive growth; if not, the risks include deepening youth underemployment and a missed opportunity to translate human capital investments into sustained economic transformation.
Please cite this publication as:
Mehrotra S. (2025), ‘India’s TVET System: Historical Legacies,
Structural Challenges, and Reform Opportunities’.
CERE TrendWatch, Volume 2025, Issue 3. CERE Observatory.
http://cereobservatory.com/trendwatch_indian_tvet
Mehrotra S. (2025), ‘India’s TVET System: Historical Legacies,
Structural Challenges, and Reform Opportunities’.
CERE TrendWatch, Volume 2025, Issue 3. CERE Observatory.
http://cereobservatory.com/trendwatch_indian_tvet
20 November 2025
Source: Periodic Labour Force Surveys, Ministry of Statistics, Government of India, 1993–2023.
Source: Periodic Labour Force Surveys, Ministry of Statistics, Government of India, 1993–2023.
Source: India Employment Report, International Labour Organisation, 2024.
Source: Periodic Labour Force Surveys, Ministry of Statistics, Government of India, 2023–2024.