ADB Clears $846M Push to Modernise India’s ITIs and Build a Future-Ready Workforce

India’s race toward becoming a global manufacturing powerhouse has always hinged on one critical question: Can the country skill its young population fast enough, and in the right direction?
With industries shifting to electric mobility, green energy, automation, and advanced manufacturing at breakneck speed, India’s skilling apparatus has struggled to keep pace. Thousands of youth graduate from Industrial Training Institutes (ITIs) every year, yet many lack the industry-ready capabilities employers now expect.

This week, India received one of its strongest reinforcements on this front.

The Asian Development Bank (ADB) has approved a massive $846 million loan to overhaul India’s skilling ecosystem — a long-awaited boost that aims to reshape how the country trains, equips, and empowers its future workforce.

And at the heart of this transformation lies a simple but powerful intention:
Turn ITIs into engines of modern skills.

A Major Leap for India’s ITIs

Through the Supporting Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs Program, ADB will work closely with the Government of India to upgrade 650 ITIs across 12 states.
The model is ambitious: a hub-and-spoke framework, where leading institutions will serve as anchors for capacity, innovation, and advanced training.

Alongside this, five National Skill Training Institutes (NSTIs) will be developed into high-tech centres of excellence dedicated to trainer upskilling — an area that has often lacked investment despite its centrality to outcomes.

The scale of the programme is one of the largest ever attempted in India’s skilling landscape. By the government’s estimates, it aims to equip 1.3 million young people with modern, industry-aligned skills that will be in high demand over the next decade.

These include:

• Electric mobility

• Renewable and clean energy

• Green technologies

• Precision and advanced manufacturing

For a country pushing to boost its manufacturing share and strengthen its global competitiveness, these are not optional skills — they’re essential.

India’s economic numbers look impressive on paper. The country is the fastest-growing major economy, with an expected growth rate of 6.4% in FY 2024–25. But beneath that growth lies a deeper challenge: employment has not kept pace with GDP.

The manufacturing sector, which should ideally absorb millions of workers, has been losing ground instead of gaining it.
In 2010, manufacturing accounted for 17% of India’s GDP. By 2022–23, it had slipped to 13%.

In global manufacturing, India holds just 2.8% share, far behind China’s commanding 28.8%.

This gap isn’t merely an economic statistic — it’s the distance between India and its aspiration to become a global production hub.

A major reason behind the drag is the persistent mismatch between skills taught and skills demanded. India's 3,500 ITIs serve millions, but many continue to operate with outdated equipment, limited industry collaboration, and curricula that lag behind technological shifts.

The ADB-backed reform attempts to fix precisely this problem.

“Modernised ITIs Will be Centres of Excellence”

ADB India Country Director Mio Oka underlined the urgency and impact of the initiative.
She noted that India’s fast-growing manufacturing ambitions can only be sustained by a workforce trained in emerging, technology-led domains.

Oka emphasised that the programme will:

• Modernise ITIs into industry-driven centres of excellence

• Improve training quality through upgraded pedagogy and infrastructure

• Enhance opportunities for women and disadvantaged communities

• Strengthen India’s global competitiveness in advanced skills

Her remarks reflect ADB’s broader vision: India cannot prosper at scale without making skill development a first-order priority.

Inside the Skilling Programme: What Will Change

The programme is structured around comprehensive reforms — not just physical upgrades, but improvements in governance, pedagogy, inclusion, and outcomes.

1. Governance Reform with PPP Models

ITIs will adopt public–private partnerships to improve autonomy, accountability, and industry alignment.
This means more industry-led curriculum, better oversight, and stronger placement linkages.

2. Modern Infrastructure & Digital Systems

Training facilities will be upgraded, buildings will become energy efficient, and digital tools will be embedded in teaching and assessments.

3. Focus on Green & Sustainable Skills

Training content will expand into renewable energy, disaster preparedness, climate-responsive technologies, and green mobility.

4. Stronger Inclusion for Women

From improved facilities to targeted programmes and pathways into leadership roles — the initiative aims to boost female participation in technical trades, historically a male-dominated area.

5. Results-Based Funding

ADB funds will be released only when institutions meet clearly defined outcomes such as improved placement rates, higher capacity utilisation, and better governance readiness.

6. Global Collaboration

The World Bank is co-financing the programme, marking a coordinated multilateral push toward India’s skilling transformation.

India’s Workforce Moment

This loan is not just about improving buildings or buying new equipment.
It represents a systemic reset in how India prepares youth for a rapidly transforming job market.

With automation, AI-led manufacturing, electric vehicles, and sustainability-led industries taking centre stage globally, India’s 500-million-strong workforce has a narrow window to upskill and rise to the challenge.

ADB’s intervention signals a broader global confidence in India’s potential — and a belief that the right skilling infrastructure can unlock a new wave of economic momentum.