The Crucial Battle for Upskilling in India

iNDIA’S ECONOMIC trajectory has been unique. Unlike Western economies that methodically transitioned from agriculture to heavy industry and later to services, rapid shifts have marked India’s path.

- Srinath Sridharan & Steve Correa

The country’s brief phase of industrialisation, tightly controlled during the licensing era,gave way to a meteoric rise of the service sector, opening doors for diverse segments of the population, including women. The digital age has allowed India to leapfrog into the digital economy, spurring explosive growth in sectors like fintech, e-commerce, and digital services.

While Western nations industrialised rapidly during the 18th and 19th Centuries, India’s colonial legacy stunted its industrial potential until after independence. Post-1947, state-owned enterprises took the lead, contrasting with the market-driven expansion in the West. Economic reforms in 1991 shifted India’s focus toward services, bypassing the extensive industrialisation Western economies experienced. This resulted in a fast-growing service sector – particularly in IT and business process outsourcing – driving India’s economy forward without the traditional reliance on manufacturing.

Despite these advances, India’s manufacturing base remains largely labour-intensive, dominated by informal MSMEs, unlike the West’s high-tech, capital-intensive industries. The shift to services offered employment that required cognitive skills rather than physical labour, creating opportunities for women, but it left gaps in other sectors. India’s slow integration into global supply chains, coupled with delayed technological adoption, has left it playing catch-up in manufacturing.