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For more than a decade, vocational education and training (VET) in India has been of particular interest for different protagonists. Countries and international organisations engaging in foreign aid and economic development have been active in the field, trying to push skill development by different means and initiatives (see e.g., Dar, 2008; World Bank, 2017). Simultaneously, the Indian government has shown a major interest in skill development through formal VET (Agrawal, 2014) in order to utilise the large potential of a young and ever-growing population. The government presses for further development of an economy that has shown impressive growth rates after liberalisation in the 1990s, but while India is frequently described as one of the most promising countries of the five major emerging economies in terms of economic growth, the challenges with respect to poverty, infrastructure and education are vast. The young and expanding population offers a large potential for growth and prosperity on the one hand but could indeed turn into a threat to economic and societal cohesion if India fails to skill its labour force and provide opportunities for decent work. Every year, approximately 12–13 million young people leave school in search of some vocational education, training or work (British Council, 2016). But while 59% of the population is in the age group of 15–54 years (United Nations Development Program [UNDP], 2019), a shortage of skilled workers is evident (Agrawal, 2014). A major investment in formal vocational training and education is considered to be essential to solve the problem of ‘skilling’ a major part of the population (Rao et al., 2014), but the system satisfies neither employers’ nor students’ needs, is of a low quality (King, 2012), and has serious problems in quantitative terms (Mitra, 2005). Starting from 2004, the Government of India (GoI) has made several efforts to modernise the formal VET sector, targeting the quantitative challenge as well as qualitative issues (British Council, 2016). However, although a skill development policy was legally implemented in 2009, the overall attempts to improve the system neither succeeded at large, nor enabled the government to meet its ambitious goal to raise the percentage of skilled personnel from 2% in 2007 to 50% in 2022 (King, 2012), as the percentage of population with any form of formal VET is still less than 3% (MSDE, 2018). In the following section, we will take a close look at existing schemes, initiatives and policies of VET in India, in order to detect possible prospects for and current challenges of the system.