India’s startups are creating more jobs, but more investments still needed to boost employment

India's startup ecosystem is poised for promising growth as the country works toward boosting economic growth and entrepreneurship — but more jobs are needed to combat high levels of unemployment.

That's according to the CEO of one of the largest recruitment firms in the country, who warned that overall unemployment rates continue to climb.

India's unemployment rate rose to 8.1% in April compared to 7.4% the previous month, according to the Centre for Monitoring Indian Economy.

The number of startups in India jumped 37% in April compared to a year ago, leading to a 14% increase in the number of jobs from startups, latest employment trends data from Foundit showed.

The report highlighted that the IT services sector had that most job opportunities, and more than 50% of new startup jobs were catered toward fresh university graduates.

"In the last few years, we had an absolute boom in startups coming out of India and now have a lot of startups in every space," Foundit CEO Chandra Garisa told CNBC. 

India has always had a "quality of talent," he said.

"The access to capital and creation of an ecosystem between government bodies and investors have created a flywheel in itself," Garisa said, referring to the investment flows entering the country that have given India's startup space a boost.

While India's push to be self-sufficient in manufacturing and IT is giving young people more career routes and choices, more needs to be done to combat India's high youth unemployment, Garisa said.

India, the world's most populous country, has the largest youth population in the world.

Young people between the age of 15 to 29 make up an astounding 83% of all unemployed people in India, the "India Employment Report 2024" showed.

According to the latest