Indian EV, electronics makers bet big on apprenticeships to bridge skill gaps, boost stipends by up to 70%

New Delhi/Mumbai: Large Indian electronics and electric vehicle (EV) manufacturers are recruiting apprentices at an unprecedented pace to address talent gaps in these booming sectors, often going beyond state-mandated quotas.

According to staffing firm Teamlease, these firms are offering as much as 70% more than the stipends mandated by states to train young apprentices for some high-demand roles.

In the EV space, employment through apprenticeship programs is doubling each year, while for the electronics sector, the growth has been more than tenfold in the past four years, according to Teamlease's degree apprenticeship program. The electronics sector, on the other hand, has witnessed a rise in apprentice participation from 7,500 apprentices in 2019-20 to a staggering 91,900 apprentices in 2023-24, marking a 12.2-fold increase.

“This surge in apprenticeship engagement not only strengthens the industry's capacity but also underscores the efficacy of policy reforms, particularly under the 'Skill India' initiative," Sumit Kumar, chief executive, Teamlease degree apprenticeship said. "Moreover, the tangible return on investment offered by apprenticeships has instilled confidence within the industry, providing a vital avenue for youth to secure formal employment.”

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Currently, there are more than 550,000 vacancies available under the apprenticeship portal of Ministry of Skill Development and Entrepreneurship.

Atul Kumar Tiwari, secretary of ministry of skill development and entrepreneurship, said till date, more than 3.2 million youth have been engaged as apprentices across 36 sectors.

“We are currently working with more than 110 industry clusters, encompassing one-third of India's districts,” said Tiwari. “The direct benefit transfer of stipends has significantly enhanced the National Apprenticeship Promotion Scheme (NAPS), with more than ₹350 crore disbursed to apprentices’ accounts since its launch last year. The next phase of the scheme will undoubtedly see an increased percentage of apprentices receiving hands-on training across establishments.”

An apprenticeship is a structured system of training where individuals, known as apprentices, learn a trade or profession through a combination of on-the-job training and classroom instruction. Apprentices can be both graduates and non-graduates. Students who turn apprentices can also use the stipend to fund their education.

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Such apprenticeship programs are also offered by companies. For example, Tata Motors runs a full-time in-house training apprenticeship program that hires students with ITI/12th pass backgrounds and trains them in specific skills. The program currently has 16,000 apprentices, of which 23% are women. According to a company spokesperson, 500 students completed the program in FY24 and landed jobs in the auto industry.

“The programme focuses on in-demand skills like mechatronics, IoT, robotics, and AI, offering hands-on training that prepares students for rewarding careers in the automotive industry,” the spokesperson said, adding that Tata Motors has also collaborated with training agencies and institutes to conduct specific modules for youth under various skill development schemes.

The electric vehicle boom in apprentices

The Indian EV market is experiencing a surge with projections indicating 10 million annual sales by 2030, at a compounded annual growth rate (CAGR) of 49% despite short-term disruptions, said Kumar, adding that the expected surge in electric two-wheeler sales is particularly notable, forecasted to reach nearly 14 million units by 2030. This forecast has been determined by Teamlease on the basis of numbers from NITI Aayog.

However, this rapid growth presents a critical challenge in the form of a talent gap, particularly in technical roles essential for EV development and deployment.

“The mismatch between demand and supply poses a potential bottleneck to the sector's full potential,” Kumar said. “Apprenticeship programs offering specialized courses such as EV service lead technician and EV battery management systems are bridging this gap by providing practical training and hands-on experience, ensuring alignment with industry requirements."

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Such training is provided by organisations like Teamlease, Automotive Skill Development Council and even by several companies such as Tata Motors and technology companies.

“We have significant challenges in addressing skill gaps because we're dealing with complex technologies like batteries, cooling products, motors, controllers, and software integration," Gajanan Gandhe, country head and VP of auto parts company DANA India said, emphasizing the importance of apprenticeships in bridging skill shortages.

"These capabilities must be built, and we invest heavily in skilling our workforce (apprentices as well as new and existing employees). We send people abroad for training and collaborate with the government's skill task force to create electrification courses and hands-on seminars,” he added.

Rapid expansion

The electronics manufacturing sector in India is also experiencing rapid growth, expanding across various domains of component manufacturing, logistics, and assembly.

Atul Lall, managing director at Dixon Technologies said, "We're operating under the NAPS policy, under which we have hired many apprentices and their upskilling and training happens on the shop floor. The trainees will then be absorbed into the workforce and, as we all know, the EMS workforce requires a far higher number of people in the coming years than what is available now."

Currently, according to Teamlease degree apprenticeship, this sector employs around 1.2 million individuals, with half engaged in manufacturing, assembly and testing, and the other half working in design, R&D, quality assurance/control, and post-sales services.

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According to Teamlease, from 2016 to 2022, workforce in the electronics space exhibited a CAGR of over 50%, and projections suggest this momentum will continue with an anticipated 50% workforce expansion over the next four to five years, driven by the increasing demand for electronics expected to create nearly 6 million jobs by 2026-27.

“The industry's commitment to investing in talented apprentices is evident, with average stipends exceeding prescribed levels by a remarkable 70% in pivotal job roles such as Smartphone Assembly Technicians and Assembly Line Operators,” Kumar emphasized.

Why India Inc. needs apprentices

“Hiring apprentices works in favor of both the company and the candidates. While the company gets exempted from paying statutory deductions like PF, for the candidate, the stipends come when many may not have completed their degree, and there is the opportunity to get the apprenticeship role converted into a job after a year,” said Aditya Narayan Mishra, CEO of CIEL HR Services.

"The stipends depend on whether the candidate has been picked up under the NAPS (National Apprentice Promotion Scheme) or NATS (National Apprentice Training Scheme) program. The former is meant for all trades and may take non-graduates, while the latter is largely for engineers and technical apprentices,” Mishra added.

“There are not enough polytechnic and Industrial Training Institutes (ITIs) and companies will have to rely on apprenticeship programs to groom skilled workforce," Satish Manne, a partner at recruitment firm Xpheno said. “In fact, going ahead, the IT sector may hire coders etc. from students who have just passed out from schools but may not join colleges immediately . As manufacturing sector gets a stronger push, apprenticeship program will become critical to meet talent needs.”

According to Teamlease data, Maharashtra has seen a remarkable surge with 260,631 apprentices, Tamil Nadu with 100,116, Gujarat with 82,360, Karnataka with 77,406, and Uttar Pradesh with 70,698 apprentices. Notably, Maharashtra mandates the recruitment of apprentices at a staggering 25% of a company's contract workforce for a financial year.