Tier-2 Cities to Contribute 35% of India’s Advanced Engineers by 2028
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Sachin Alug, CEO, NLB Services
Engineering has long stood as the backbone of India’s progress, shaping industries, infrastructure, and innovation. With India’s technology sector already valued at $250 billion, contributing 7.5% to the GDP, and projected to touch $350 billion by FY25, the demand for highly skilled engineering talent has reached unprecedented levels. As India embraces its ‘Techade,’ engineers are set to play a defining role in steering the country towards becoming a global innovation hub.
India produces nearly 1.5 million engineering graduates annually, spanning disciplines such as mechanical, civil, software, IT, and manufacturing. Yet, employability remains a challenge—while 60-72% of graduates are deemed employable, only 45% currently meet industry standards. The skills gap has become a critical barrier, especially in new-age domains like artificial intelligence, data science, electric vehicles (EVs), and semiconductors. Bridging this gap through structured upskilling, reskilling, and industry-academia collaboration will be pivotal for India to retain its global edge.
Adding to this momentum, the expansion of Global Capability Centres (GCCs) has further accelerated the demand for engineering talent. Today, engineers from India are not just powering domestic enterprises but also leading innovation at some of the world’s largest technology companies. Additionally, an estimated 15-16% of engineering graduates now come from Tier-2 and Tier-3 cities, and this share is projected to rise as 30-35% new institutes/tech parks are to be established by 2028 in cities like Jaipur, Vadodara, Coimbatore, Kochi, Pune and Indore as they are fast becoming low-cost, high-impact hubs, offering enterprises both talent depth and scalability. With focused investments in local skilling ecosystems, incubation centres, and industry partnerships, Tier-2 engineers could supply 15-20% of India’s advanced engineering workforce by 2027.
STEM-driven innovation, the AI boom, the EV revolution, and India’s semiconductor ambitions together define the next frontier of engineering talent. With 70% of future jobs expected to demand STEM-based skills, engineers with expertise in AI/ML, data engineering, and embedded systems will be at the forefront of India’s digital and industrial transformation. At the same time, the AI sector is becoming the backbone of modern enterprises, with India projected to need 1 million AI-trained engineers by 2026, even as supply currently meets only 20% of demand. Roles in AI/ML, generative AI, ethical AI governance, and AI-infrastructure engineering are expected to dominate, creating opportunities for engineers equipped with machine learning, natural language processing, and AI ethics & governance skills. Similarly, the EV industry, growing at a 30-40% CAGR, will demand 10-20 lakh engineers by 2030 across battery technology, automotive electronics, and sustainable design, making it both a driver of jobs and a catalyst for India’s green transition.
Meanwhile, the semiconductor sector, with the latest developments like India’s first indigenous 32-bit microprocessor, VIKRAM3201, reducing reliance on imports, will create many job opportunities in the sector. Subsequently, Indian will require 25,000–30,000 skilled engineers annually in Chip design, manufacturing process engineering, and testing & packaging, positioning India as a global design and manufacturing hub.
