India’s skilling ecosystem is undergoing a silent crisis. Across the country’s 15,000-odd Industrial Training Institutes (ITIs), half of all seats go unoccupied every year – nearly 13 lakh vacant places across government and private institutions combined. The reason is not a shortage of young people looking for skills training. It is a crisis of relevance and trust.A 2024 study by the Ministry of Skill Development and Entrepreneurship found that more than half of ITI graduates remain unemployed. When parents see that, they steer their children elsewhere. India’s much-anticipated demographic dividend begins to look like a demographic delay.Two major structural fault lines reveal the reason. The first is gender. Less than 15% of ITI students are female and the system is built to keep it that way, with training almost entirely segregated along gender lines. The second is relevance. The trades ITIs offer is overwhelmingly skewed towards traditional manufacturing sector leaving the service sector – the largest and fastest-growing source of skilled employment in the country – almost entirely unserved.Misaligned tradesThe trade dominating ITI enrolment today – electrician, fitter, diesel mechanic, welder, wireman – are essentially those catering to the manufacturing sector, which employs about 10% of India’s total workforce. Just two trades – electrician and fitter – account for 50% of all occupied seats in the country as per the latest National Council for Vocational Training (NCVT) MIS data.Meanwhile, India’s service sector, which accounts for 60% of the Gross Domestic Product (GDP) and approximately 34% of employment is almost invisible inside ITI course catalogues. Information Technology, healthcare, financial services, logistics: these are the engines of job creation in 21st century India, and the ITI ecosystem, has mostly failed to address this need.Occupational Segregation in ITI TrainingBuried within this supply-demand mismatch is an equally troubling structural flaw: the trade wise near absolute gender segregation.The State of Working India 2026 report’s analysis reveals that the top 10 male-dominated trades account for roughly 80% of total enrolment in ITIs, with male students comprising over 90% in almost every one of them. The only exception is Computer Operator and Programming Assistant (COPA), with a 60% male share. Female students, less than 15% of total enrolment, are clustered almost exclusively in trades such as Sewing Technology, Dress Making, Fashion Design and Technology, Cosmetology, and Stenography – each seeing female enrolment approaching 90 percent. The pattern is not incidental but institutional.Gaps in ITI ReformsIndia has made consistent progress towards introducing innovative skills policies. The establishment of the Ministry of Skill Development and Entrepreneurship (MSDE) in 2014, the National Skill Development Policy of 2015, and successive ITI upgradation schemes represent genuine institutional intent. But intent has consistently outpaced implementation.The comparison with other developing countries is sobering. According to the UNESCO TVET Data Portal, while only 5% of students in India are enrolled in formal skills training, the figure stands at 30% in Thailand, 37% in Indonesia, 38% in China, and over 43% in Argentina and 45% in Egypt. India, despite having the largest youth population in the world, is training fewer of them, proportionally, than almost any comparable economy.The skills policy initiatives have not been accompanied by the harder work of curriculum reform, instructor quality upgrades, or sustained industry linkage. The result is a system that is simultaneously under-enrolled and under-performing.What reforms are imperativeTwo interventions deserve to be prioritised.First, the gendered architecture of ITI trades must be dismantled. This means the government must actively encourage recruiting female students into skills training courses. This should go beyond the usual quota exercise to a structural redesign of how these institutions present themselves and what they offer. It also means expanding dedicated women’s ITIs as aspirational institutions. Breaking trade-based gender segregation is essential to prevent educational institutions from reinforcing labour market bias and to increase women’s participation in the skills ecosystem.Second, ITI curricula must be aligned with where employment actually is, not where it was. A 2026 JustJobs Network study on education-to-employment transition of youth in India found generic national insights about growing sectors have consistently failed to improve training outcomes. The study emphasis on granular, local labour market intelligence to drive real change. India needs a dynamic demand-mapping system that tracks hiring trends at the district level and informs decisions about which trades are offered, expanded, or retired.The real cost of inactionIndia’s working age population is expected to peak over the next decade and a half, but this demographic window will not stay open indefinitely. ITIs have the capability to drive the skills development ambition since it remains among India’s most scalable, most geographically distributed infrastructure. But they need extensive modernisation to meet the needs of a 21st century skills ecosystem.Half empty classrooms are a warning signal that policy makers and administrators can no longer afford to ignore.Aditya Prem Kumar is a Research Associate at JustJobs Network.