Indian Students Turn To Overseas Stem Degrees Amid Hiring Squeeze
Indian students are increasingly looking overseas for postgraduate Stem qualifications, particularly in engineering, as a challenging domestic job market and stronger international career prospects influence higher education decisions, according to a report and commentary released by Prodigy Finance.The latest study-abroad cycle across India, the United States, Britain and Germany shows growing interest in science, technology, engineering and mathematics (Stem) programmes, with engineering-related postgraduate degrees emerging as a preferred choice among students seeking stronger employment outcomes, the company said.
The shift comes as India's employment market struggles to absorb large numbers of engineering graduates. Citing findings from the India Skills Report 2026, Prodigy Finance said employers are increasingly prioritising mid-level and experienced professionals, while the manufacturing sector has reduced fresher hiring to just 5 per cent of new positions.
The mismatch between graduate output and employer demand is contributing to weak employment outcomes for new entrants to the workforce, the company said.
According to data cited by Prodigy Finance from ICEF Monitor's April 2026 report, fewer than 7 per cent of graduates in India secure permanent salaried employment within a year of graduation, while less than 4 per cent obtain white-collar jobs.
"The problem is not a lack of talent. It is a structural mismatch between what colleges produce and what industry actually hires for," the company said, citing the report.
Sonal Kapoor, Global Chief Business Officer at Prodigy Finance, said growing demand for artificial intelligence and technical skills across sectors was encouraging students to pursue advanced qualifications.
"AI literacy is no longer optional. The demand for it spans healthcare, corporate, finance, and every sector you can name," Kapoor said. "Students who chose higher education in engineering or technical fields are on the right track."
Kapoor said postgraduate qualifications, including master's degrees and MBAs, have become increasingly important as employers seek specialised skills and international exposure.
According to Prodigy Finance, salary expectations are also influencing student choices. The company cited Glassdoor submissions from April 2026 showing that typical starting salaries for BTech graduates in India range between Rs 4.5 lakh and Rs 8 lakh annually, although many engineers begin their careers on salaries closer to Rs 2.5 lakh to Rs 3 lakh a year, particularly at smaller firms.
By contrast, engineering graduates in the United States earn average starting salaries of USD 81,198, equivalent to around Rs 67 lakh, according to figures from the National Association of Colleges and Employers cited by the company. In Britain, engineering graduates earn a median starting salary of £31,975, or roughly Rs 34 lakh, based on Higher Education Statistics Agency data referenced in the report.
Despite current employment challenges, Prodigy Finance said India's long-term outlook remains positive. The India Skills Report 2026 projects global labour shortages of 85 million workers by 2030, while India is expected to generate a surplus of 45 million skilled professionals.
Women are also playing a growing role in the sector, with more than 40 per cent of India's Stem graduates now female, according to data cited by the company.
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