The technology sector in India will require over 1 million engineers with advanced skills in AI (artificial intelligence) and others within the next 2-3 years, according to an industry body.

The sector will need to retrain over half of its current workforce for roles in areas like AI, big data analytics, and cyber-security, according to Sangeeta Gupta, senior vice president and chief strategy officer at the National Association of Software and Service Companies in Bengaluru.

In addition, new college graduates will only meet a quarter of the demand for advanced tech positions, she added.

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

India's $250 billion tech sector is crucial to the economy, providing employment for approximately 5.4 million individuals. Tech services account for around 7.5% of the nation's gross domestic product, which exceeds $3 trillion, Bloomberg reports.

IT businesses such as Tata Consultancy Services Ltd. are having difficulty filling positions due to a significant skills gap between the available workforce and job requirements. This issue threatens to disadvantage Indian IT firms compared to global competitors like International Business Machines Corp. and Accenture Plc.

Last month, TCS announced it is unable to fill 80,000 positions due to the skills gap. The company also doubled the number of employees trained in AI during the fiscal year ending in March. 

Whereas in June, Larsen & Toubro Ltd., India's largest engineering and construction firm, reported that its IT and IT-enabled services unit is short of 20,000 engineers.

Furthermore, Gupta stated that the fundamental cause of India's skill gap is the country's inadequate schooling system, spanning from lower grades to high school. She noted that colleges fail to equip students with sufficient practical skills, which are crucial for the job market.

According to Nasscom, the demand-supply gap for digital talent in India will increase from the current 25% to approximately 29% by 2028.