India's Unemployment Rate Declines in 2025, with Shift Toward Salaried Work

India's Labour Market Conditions Improve in 2025

Key Highlights

• Unemployment rates declined in both rural and urban areas, with 2.4% and 4.8% recorded in 2025, respectively, compared to 2.5% and 5% in 2024.
• Unemployment among educated persons (secondary level and above) fell to 6.5% in 2025, from 7% in 2024.
• The youth unemployment rate (15-29 years) declined to 9.9% in 2025, from 10.3% in 2024.

Labour Force Participation and Employment Structure

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

• The Labour Force Participation Rate (LFPR) remained steady at 59.3% in 2025, with the Worker Population Ratio (WPR) holding at 57.4%.
• The share of regular wage and salaried jobs increased to 23.6% in 2025, from 22.4% in 2024, indicating a gradual formalisation of the workforce.
• The share of self-employed workers continued to decline, falling to 56.2% in 2025, from 58.2% in 2023.

Sectoral Shifts and Wages

• The composition of jobs is shifting, with agriculture's share in employment declining and manufacturing and services sectors seeing gains in worker participation.
• Wages have inched up, particularly for women, with earnings for women growing faster than for men in percentage terms.

Remaining Challenges

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

• 25% of youth aged 15-29 remain outside employment, education, or training (NEET).
• Skill formation remains limited, with less than 5% of youth receiving formal vocational or technical training, indicating gaps in employability.