More jobs are being created by India's startups, yet additional investments are required to increase employment.

• While more fresh graduates in India are being employed in startups, the recruitment firm Foundit highlights the need for more jobs to combat high levels of unemployment.
• Over 23% of new startup jobs were given to fresh university graduates, with the majority of opportunities being in IT services.
• Chandra Garisa, CEO of Foundit, cautioned that while efforts are being made, more action is required to generate more employment opportunities and address India's high youth unemployment rate.

India's startup ecosystem is set for promising growth as the country strives to increase economic growth and entrepreneurship, but more jobs are required to tackle high unemployment levels.

According to the CEO of a major recruitment firm, the overall unemployment rate is increasing, as stated in a recent warning.

The unemployment rate in India increased from 7.4% in March to 8.1% in April, as per the Centre for Monitoring Indian Economy.

The number of jobs from startups in India increased by 14% in April compared to the same month last year, according to Foundit's latest employment trends data.

The IT services sector offered the most job opportunities, with over 50% of new startup jobs targeted at fresh university graduates, according to the report.

Chandra Garisa, Foundit CEO, informed CNBC that there has been a significant increase in startups emerging from India in recent years, resulting in a diverse range of startups across various sectors.

India has always had a "quality of talent," he said.

Garisa stated that the influx of capital and the establishment of a network between government agencies and investors have created a self-sustaining cycle of investment in India's startup industry.

To combat India's high youth unemployment, more needs to be done in addition to the push for self-sufficiency in manufacturing and IT, according to Garisa.

India's high youth unemployment

The world's largest youth population resides in India, which is also the most populous country globally.

The "India Employment Report 2024" revealed that 83% of all unemployed individuals in India are between the ages of 15 and 29.

The number of university enrollments in fiscal year ending March 2022, according to the latest government data, was 43.3 million.

Garisa stated to CNBC that due to pressures on hiring and profitability, companies have not invested in entry-level talent in the past year, preferring instead to hire experienced talent that can be immediately utilized.

"He stated that entry-level hiring is not as it was two to three years ago, as companies will not invest in growth until the macro situation improves."

According to Foundit data, the number of jobs in the internet sector decreased by 3%, while the number of jobs in fintech fell by 10%. Additionally, the number of jobs in education was 8% lower.

Despite the rise in startups and companies, funding, regulatory issues, and a skills mismatch remain obstacles to overcome, according to the recruitment firm.

Boost in manufacturing jobs

The manufacturing sector in India experienced the greatest job growth, with a 31% increase, primarily due to increased investment in the auto, chemical, pharmaceutical, and food processing industries, according to a survey.

Garisa of Foundit stated that manufacturing and production involve a lot of activity and production, and global companies are increasingly adopting a China plus one strategy for automobile, electronics, and consumer goods.

The Biden administration is urging American businesses to shift their electronics and technology manufacturing operations from China to more friendly countries in the Asia-Pacific region, including India.

In the post-pandemic world, most organizations are increasingly choosing India as their go-to destination for manufacturing, rather than blindly heading to China, according to Garisa.

The IT sector, comprising hardware and software, experienced a 9% increase in jobs due to increased investments to address the shortage of IT talent in the country, according to Foundit data.

Garisa observed that regardless of the manufacturing sector, there is a clear technological layer driving all the innovation.