A quiet transformation has begun in Industrial Training Institutes (ITIs) across the country. The Pradhan Mantri Skilling and Employability Transformation through Upgraded ITI (PM-Setu) is a partnership between the government and industry to upgrade 1,000 ITIs into centres of excellence in skilling.
Picture a young welder-trainee who walks into an ITI workshop that still uses equipment from another era. She is talented, disciplined and hungry to learn. What she lacks is not ability, but access. Access to the machines her counterparts in Germany or South Korea train on, to instructors well acquainted with today’s factory floor, and to a curriculum that speaks the language of tomorrow’s jobs.
Her story is not exceptional. India has around 13,800 ITIs and nearly 1.5 million young people enrolled in them this year. Most Indians have never thought about that number and few economists cite it. Yet it deserves more attention than it gets. It is arguably as consequential to India’s growth over the next two decades as any semiconductor fab or highway, and underfunded in the context of its importance.
India stands at a defining moment. Semiconductor manufacturing, electronics, renewable energy, defence production, logistics, global capability centres and digital services are all expanding.
As the country strengthens its place in global value chains, demand for skilled technicians, supervisors and professionals will grow sharply. The Economic Survey 2025-26 puts it plainly: India’s next phase of growth must be driven by stronger human capital, higher productivity and a workforce equipped for emerging technologies.
PM-Setu answers that need. It is not simply a scheme to refurbish training infrastructure. It is a structural reform, meant to align vocational education with a fast-changing economy, prepare young Indians for high-quality employment, and build the human capital base on which Viksit Bharat 2047 depends.
With an outlay of ₹60,000 crore, the programme will upgrade 1,000 government ITIs through 200 hub-and-spoke clusters and establish five National Centres of Excellence (NCoE) by strengthening National Skill Training Institutes. Nearly 2 million young people are expected to benefit directly.
Here is the premise. As the economy moves towards advanced manufacturing, artificial intelligence and clean energy, skills are no longer just a pathway to employment; they drive productivity, competitiveness and growth. Industry, then, should not merely recruit skilled workers. It should help create them.
PM-Setu builds a deep partnership between training institutions and industry that covers the curriculum, infrastructure, instructor development, apprenticeships and placements to keep vocational education contemporary and practical, rather than periodically retrofitted.
That premise is finding takers. More than 20 states and Union territories have invited industry into ITI clusters and seven Strategic Investment Plans (SIPs), each a five-year blueprint prepared jointly by a state and an anchor industry partner, have been approved by the National Steering Committee. These seven alone have committed more than ₹1,500 crore, with approvals expected to accelerate.
The architecture is what makes PM-Setu different from earlier efforts. Each cluster’s cost is shared roughly in a ratio of 50: 33: 17 between the Centre, the state and the anchor industry partner, pooled through a special purpose vehicle (SPV).
Crucially, the equity structure inverts that ratio. The industry partner holds a controlling 51% stake, with the Centre and state together holding 49%. This gives industry the authority to run the institution, from operational plans and curricula to academics and placements.
The approved plans show how varied the partnership can be. ArcelorMittal/Nippon Steel India, in Andhra Pradesh and Gujarat, proposes integrated manufacturing ecosystems using Industry 4.0 tools and AI-enabled learning.
Apollo MedSkills in Telangana envisions India’s first healthcare-focused ITI ecosystem, with simulation hospitals and a focus on jobs for women and underserved communities.
Jindal in Odisha proposes to turn the state’s mineral belt into a world-class mining and steel skilling ecosystem. In all, these SIPs will train over 60,000 youth through more than 100 new and upgraded programmes.
For a company weighing whether to join, the math is simple. PM-Setu offers what no post-recruitment training can: the ability to shape a workforce before it walks through the door. An anchor partner co-designs the curriculum, co-brands the institution and gains first access to apprentices pre-screened against its own standards.
The result is lower attrition, shorter induction and reduced hiring costs. In capital-intensive sectors such as semiconductors, automotive, steel, chemicals, healthcare and pharmaceuticals, where under-trained workers are expensive, this is a material business advantage.
That is why what is asked of industry can be put plainly. The government has done the harder part. It has committed the money, ceded control and opened the door. Seven anchors have walked through it. The country needs many more, and it needs them at scale. A handful of flagship clusters will not staff the economy India expects to become by 2047.
If Indian industry wants a workforce fit for the plants and laboratories it is building, it will have to help build that workforce itself. The firms that move first will set the standards.
The hub-and-spoke design spreads these gains. Each upgraded ITI serves as a hub for surrounding institutions, sharing laboratories, equipment and faculty, so that improvements diffuse across the ecosystem rather than pool in a few campuses.
At the apex, five NCoEs are being set up at NSTIs in Bhubaneswar, Chennai, Hyderabad, Kanpur and Ludhiana for advanced training, instructor development and international collaboration.
India has signed a joint declaration of intent with Germany for renewable energy at Hyderabad, is developing aeronautics at Kanpur with France, and has MoUs with Singapore for advanced manufacturing at Chennai and with Australia for mining technology at Bhubaneswar.
These ties also position India well to help meet a growing global shortage of skilled technicians as advanced economies age, provided its training meets world standards.
PM-Setu will be judged not by ITIs upgraded or crores disbursed. Those are inputs. The real question is whether, a decade from now, an ITI certificate from Bhubaneswar or Ludhiana carries the same weight in a hiring decision as one from Stuttgart or Seoul, and whether the welder who began this story now runs one of the finest workshops.
Every economy that reached developed status invested in its people before the returns were visible. India is making that investment now. Industry’s task is to match it.
These are the authors’ personal views.
The authors are, respectively, secretary, ministry of skill development and entrepreneurship, and chief economic advisor to the Government of India.