Urban youth unemployment in India has shown a steady decline over the last few years and remains significantly lower than the global average, according to a research report by State Bank of India (SBI).

The report, based on the latest Periodic Labour Force Survey (PLFS) 2025 data and unit-level analysis, highlighted that India's youth unemployment rate has moderated consistently since 2022 despite persistent global labour market challenges.

The SBI report said, "Globally youth unemployment rate is estimated at around 12.6 per cent in 2025 for the age group 15-24 years (ILO, 2025), this is significantly higher than the overall global unemployment rate, highlighting the persistent challenges faced by young population in accessing employment opportunities."

In comparison, India's youth unemployment rate stood at 9.9 per cent in 2025, lower than the global benchmark. The report noted that the rate has gradually declined from 10.9 per cent in PLFS 2022 to 10.3 per cent in 2024 before reaching 9.9 per cent in 2025.

The report further observed that urban youth unemployment, though higher than rural unemployment levels, has also witnessed a notable decline over the years.

According to the findings, urban youth unemployment dropped from 16.8 per cent in 2022 to 14.3 per cent in 2024 and further to 13.6 per cent in 2025.

Rural youth unemployment, meanwhile, remained relatively stable in the range of 8-9 per cent during the same period.

"The rural-urban pattern shows persistently higher youth unemployment in urban areas, although urban unemployment declined from 16.8 per cent in 2022 to 14.3 per cent in 2024, while rural unemployment remained lower and broadly stable around 8-9 per cent," the report added.

The SBI study attributed part of the youth unemployment numbers to the growing trend of higher education participation among young people.

It argued that conventional unemployment measurements in the 15-29 age bracket may not fully reflect labour market realities because many individuals in that age group continue formal education.

The report suggested that unemployment rates for the population aged 30 years and above present a more accurate picture of structural employment conditions in the country.

Using its revised methodology, SBI estimated unemployment rates for the 30-plus population at substantially lower levels. For urban males, the unemployment rate was estimated at 2.26 per cent compared to the PLFS-reported 11.8 per cent for younger age groups.

The report also noted that India's labour market is undergoing structural transformation with improving participation in manufacturing and non-agricultural sectors, alongside rising employment opportunities across several states.

Published on May 8, 2026