India's Labour Market Shows Moderate Activity but Strong 2026 Hiring Outlook Driven by Non-IT and AI/ML Growth

Indias labour market showed moderation in activity, as revealed by official monthly and quarterly Periodic Labour Force Survey (PLFS) data alongside Centre for Monitoring Indian Economy (CMIE) data and the high-frequency indicators representing industry hiring. Together, the data indicate moderation in job creation in the economy, with softening of labour force participation. However, the hiring outlook for 2026 remains strong, coupled with increased employability of the workforce, especially among women, signalling a growing and increasingly skilled workforce ready to meet the evolving economic demands.

Examining the trends by sector, the share of agricultural employment increased in Q2 of FY26 while the share of self-employed individuals rose, and the share of casual labourers decreased. The Naukri jobspeak index, a key indicator of white collar hiring, witnessed a decline of 9% YoY in October 2025. The easing of white-collar hiring during the month can be attributable to seasonal factors such as the Diwali-Dussehra festive cluster temporarily slowing recruitment momentum.

Even with the seasonal factor dampening overall hiring demand, the underlying non-IT sector hiring remains robust. Sectors such as Accounting and Finance (15%), Education (13%), and BPO/ITES (6%) showed positive YoY growth. Importantly, the sustained surge in AI/ML job opportunities with 33% YoY, signals ongoing digital transformation and demand for specialised talent.

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