ADB Approves $846M Loan to Boost India’s Future-Ready Skilled Workforce

India’s manufacturing and advanced technology sectors are undergoing rapid transformation, driven by global competitiveness, sustainability goals, and digital innovation.

The Asian Development Bank (ADB) has approved a substantial $846 million loan to support India's transformation of its technical and vocational education system through a nationwide initiative to modernize Industrial Training Institutes (ITIs) and strengthen training for emerging technologies and green industries.

The new investment, part of the Supporting Pradhan Mantri Skilling and Employability Transformation (PM-SET) through Upgraded Industrial Training Institutes Program, is expected to benefit over 1.3 million youth across 12 Indian states by modernizing vocational training and aligning it with the needs of the 21st-century economy.

Preparing India’s Workforce for a Competitive, Green Economy

India’s manufacturing and advanced technology sectors are undergoing rapid transformation, driven by global competitiveness, sustainability goals, and digital innovation. But many of the country's 3,500+ ITIs have fallen behind in equipping youth with relevant, modern skills.

“India’s manufacturing sector requires a highly skilled workforce to remain globally competitive and foster inclusive growth,” said Mio Oka, ADB Country Director for India. “This program will modernize ITIs into industry-driven centers of excellence and broaden opportunities for women and disadvantaged groups.”

Key Components of the ADB-Supported Program

1. Modernizing 650 ITIs Across 12 States

• ITIs will be restructured under a hub-and-spoke model, allowing select institutions to function as regional hubs of excellence, delivering advanced training to surrounding institutions.

• The curriculum will emphasize high-growth sectors such as:

  • Renewable energy

  • Electric mobility

  • Advanced manufacturing

  • Digital technologies

  • Green jobs and sustainability practices

2. Upgrading Five National Skill Training Institutes (NSTIs)

• These will be developed into Centers of Excellence for advanced trainer development, raising the overall quality and consistency of instruction nationwide.

3. Enhancing Governance Through Public–Private Partnerships

• Governance reforms will grant ITIs greater autonomy and operational flexibility.

• Stronger private sector participation will help ensure course offerings reflect current industry standards and employment trends.

4. Digital and Infrastructure Upgrades

• ITIs will adopt smart classrooms, online learning systems, and energy-efficient facilities.

• Investments will promote climate-resilient and health-safe campuses, supporting both sustainability and disaster preparedness.

5. Focus on Inclusion and Gender Equity

• The program will prioritize female participation, including:

  • Improved on-campus facilities for women students

  • Leadership and training opportunities for women

• Additional outreach to marginalized and disadvantaged communities will ensure broader inclusion.

6. Green Skills and Climate-Responsive Training

• Curricula will be updated to reflect climate action priorities, such as:

  • Sustainable energy systems

  • Environmental compliance in industry

  • Waste management and circular economy practices

  • Adaptation and resilience-building

Results-Based Lending Linked to Measurable Outcomes

ADB’s investment is structured as results-based lending, meaning that disbursements are tied to quantifiable outcomes such as:

• Higher graduate employment rates

• Improved institutional performance metrics

• Increased female enrollment and leadership roles

• Expanded public–private collaboration

This results-driven model ensures greater accountability and long-term sustainability for the reforms.

Global Collaboration: ADB and World Bank Partnership

The program is being implemented in partnership with the World Bank, which is co-financing the initiative. Together, both institutions are supporting India’s commitment to becoming a global hub for advanced skills, with training that is digitally enabled, environmentally sustainable, and inclusive.

Strategic Impact on India’s Workforce and Economy

With India targeting ambitious growth in manufacturing under its Make in India and Skill India initiatives, the country needs to close the gap between training and employability. The ADB-backed transformation of ITIs is designed to:

• Increase youth employability in fast-changing job markets

• Prepare India’s workforce for Industry 4.0 and green transition

• Strengthen national competitiveness in global value chains

• Equip trainers and institutions for lifelong learning systems

By linking vocational training with economic modernization, this investment represents a critical pillar of India’s future-ready workforce development strategy.