New Delhi, Sep 12 : Tier-2 and Tier-3 cities in India are set to play a bigger role in shaping the country's engineering workforce over the next few years, a new report said on Thursday.

According to data compiled by NLB Services, these cities could account for nearly 35 per cent of India's advanced engineers by 2028, as fresh institutes, technology parks and skilling hubs emerge outside traditional metros.

Cities such as Jaipur, Vadodara, Coimbatore, Kochi, Pune and Indore are fast becoming attractive destinations for enterprises seeking low-cost, high-impact talent.

The report highlights that India already produces around 1.5 million engineering graduates every year, across disciplines like mechanical, civil, IT, software and manufacturing.

However, only 45 per cent of them currently meet industry standards, despite 60'72 per cent being considered broadly employable.

The skills gap is proving to be a challenge in new-age fields such as artificial intelligence, data science, electric vehicles (EVs) and semiconductors.

Focused investments in reskilling, incubation centres and industry-academia partnerships are expected to bridge this gap, with Tier-2 engineers projected to supply 15'20 per cent of India's advanced engineering workforce by 2027.

India's technology sector, valued at $250 billion and contributing 7.5 per cent to GDP, is projected to touch $350 billion by FY25, the report said.

This growth is fueling demand for engineering talent across industries. The expansion of Global Capability Centres (GCCs) has further accelerated the trend, with Indian engineers not only powering domestic enterprises but also leading innovation at some of the world's largest technology companies.

The report also underscores that the future of India's economy will be driven by STEM-led innovation.

With 70 per cent of upcoming jobs expected to demand STEM skills, expertise in areas like AI, machine learning, data engineering, embedded systems and ethical AI governance will be crucial.

India is projected to require 1 million AI-trained engineers by 2026, but current supply meets only 20 per cent of this demand, the report added.

Similarly, the EV industry, which is expanding at a 30'40 per cent annual growth rate, is expected to need 10'20 lakh engineers by 2030 across areas such as battery technology, automotive electronics and sustainable design.

The semiconductor industry too is opening up new opportunities, especially after India's first indigenous 32-bit microprocessor, VIKRAM3201, marked a step towards self-reliance.

The country is expected to need 25,000'30,000 skilled engineers every year in chip design, process engineering and testing.

/IANS