---
title: "Morgan Stanley: \"Employment Trap\" Approaches, India Needs an Economic Miracle to Resolve the Crisis"
description: "Morgan Stanley economists warn that the Indian economy needs to grow by 12.2% annually to address the issue of insufficient employment. The report points out that the youth unemployment rate in India "
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/259465956.md"
published_at: "2025-09-30T07:18:31.000Z"
---

# Morgan Stanley: "Employment Trap" Approaches, India Needs an Economic Miracle to Resolve the Crisis

> Morgan Stanley economists warn that the Indian economy needs to grow by 12.2% annually to address the issue of insufficient employment. The report points out that the youth unemployment rate in India has reached 17.6%, facing the dual challenges of unemployment and underemployment. Agricultural employment has hit a 17-year high, and Morgan Stanley calls for strengthening industrial and export growth, accelerating infrastructure construction, and implementing reforms to avoid falling into an "employment trap," which would impact India's goal of becoming a global growth engine and exacerbate immigration pressures

Morgan Stanley economists warn that the Indian economy needs to sustain an astonishing growth rate of 12.2% per year to address its severe employment shortfall. Led by Chetan Ahya, the economists pointed out in their report that India's labor market is facing a dual challenge of unemployment and underemployment. Currently, the youth unemployment rate in India stands at 17.6%, the highest level in the region. Meanwhile, a large influx of labor into the agricultural sector has led to agricultural employment reaching a 17-year high. Morgan Stanley warns that unless India achieves stronger industrial and export growth, accelerates infrastructure development, and implements widespread reforms to enhance labor skills and improve the business environment, the country risks falling into an "employment trap." This could not only slow its ambition to become the next global growth engine but also exacerbate the pressure for outward migration, especially against the backdrop of rising costs for U.S. H-1B visas

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.