Editorial: Wake up to the jobs crisis

India’s jobs crisis and the competition for admissions to technical educational institutions are both poised to get worse due to the immigration and visa restrictions adopted by the United States. A sign of the oncoming challenge is evident in the steep fall in outward remittances for education. Reserve Bank of India (RBI) data shows that Indian students going abroad for higher studies remitted 24% less money to foreign universities in August 2025 compared to the same month last year.

August is the peak month for Indian students going to American universities for the fall semester. Outward remittances for studies abroad, permitted under RBI’s Liberalised Remittance Scheme (LRS), amounted to Rs 2,650 crore in August this year, the lowest figure since 2017 when the exodus of Indian students began to spurt.

This decline in outward remittances corresponds with a nearly 50% drop in Indian student arrivals at US universities during July-August 2025 compared to last year. India annually sends a large number of students to foreign universities, with the US being the top destination. In August 2024 alone, about 74,825 Indian students went to the US. That number fell by 44.5% to 41,540 in August 2025. July 2025 also witnessed a similar drop compared to July 2024.

This decline is due mainly to tighter US visa policies and increased administrative delays, but also rising tuition and living costs. F-1 student visa applications as well as approval rates have fallen, forcing many students to reconsider their plans. With thousands of Indian students deferring or cancelling plans to study abroad, especially in technical and job-oriented courses, the immediate pressure shifts to Indian universities. Private universities in India do have expanded capacity in humanities and liberal arts, but STEM seats in apex technical institutions are limited and extremely competitive. For example, India's premier engineering institutions, such as IITs, NITs, and AIIMS, combined offer only around 2,00,000 seats annually across the country in high-demand technical and medical fields, far less than the total demand.

The bigger challenge is jobs. The international study pathway was always closely tied to employment opportunities abroad, and so absorbed some of the pressure on job creation in India. Now, the sharp fall in overseas study and migration prospects means India must urgently create domestic job openings to absorb these aspirants. India's employment market is already strained, with unemployment among urban youth soaring to 23% as per recent surveys. Job scarcity in the formal sector is even more intense.

Despite these challenges, there has been a negligible policy response from the Union government or policymakers to address an emerging problem. No coordinated strategy exists to reform higher education to absorb such shocks, nor are there any reforms to ignite real job generation. Governments continue to work with the superficial diagnosis that this is a skilling problem. Or the other approach is to treat it as a welfare problem and announce sops, as political parties are promising in the Bihar election campaign. The problem goes much deeper. India simply does not have policies to generate jobs in any decent number, let alone jobs requiring high skills. This needs an overhaul of policies on higher education, investment, and industry. A government-run internship programme or another round of government appointments is just not going to cut it.