India’s hiring outlook rebounds to double digits; AI and Tier-II cities lead the shift

From AI-driven recruitment to booming regional hubs, here’s how India’s job market is transforming in 2026, according to the CII-Taggd report

PGurus Newsdesk

November 12, 2025

AI reshapes recruitment as India’s job growth rebounds to 11% for 2026

Tier-II cities and mid-level professionals to dominate India’s evolving job market

After a year of sluggish single-digit growth, India’s hiring sentiment is bouncing back, with intent rising to 11 per cent for 2026 — up from 9.75 per cent last year — driven by formalisation, regional expansion, and digital acceleration, according to the India Decoding Jobs 2026 Report by Taggd in collaboration with the Confederation of Indian Industry (CII).

Sectors such as banking, financial services and insurance (BFSI), manufacturing, and infrastructure are set to power this revival, marking a shift “from recovery to reinvention,” said Devashish Sharma, Co-founder and CEO of Taggd.

“This resurgence marks a shift from recovery to reinvention, powered by digital acceleration, formalisation, and regional expansion,” Sharma added.

The comprehensive report draws insights from over 300 talent leaders across 21 industries, providing a data-backed view of India’s evolving job market.

AI reshaping hiring dynamics

The report highlights that artificial intelligence is revolutionising recruitment, with 60% of recruiters using AI for resume screening and 45% for interview automation. This technological transformation has made AI-related skills — from GenAI and cloud computing to cybersecurity — as crucial for recruiters as they are across industries.

Employers are also seeking digital and data specialists, AI/ML engineers, solutions architects, and sustainability professionals to build future-ready teams.

Rise of experienced professionals and Tier-II cities

The year 2026 is emerging as the year of experienced professionals, as companies increasingly prioritise mid- and senior-level hires with 6 to 15+ years of experience.

Meanwhile, Tier-II cities are becoming major talent hubs, accounting for 32% of projected jobs in 2026. Organisations, especially global capability centres (GCCs), are expanding into regional markets for cost efficiency and access to emerging skill sets.

Female hiring is projected to stay at 30% in FY 2026-27, consistent with 2025 levels but below the 36% reported in 2024, the report noted.

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