India's unemployment rate climbed to 5% in the January-March quarter from 4.8% in the preceding three months, driven primarily by an increase in female joblessness. According to the Ministry of Statistics and Programme Implementation (MoSPI) in its Periodic Labour Force Survey (PLFS), overall urban unemployment saw a slight decrease to 6.6% from 6.7%, while rural unemployment edged up to 4.3% from 4.0% in the previous quarter. The Labour Force Participation Rate (LFPR) remained steady at 55.5% in the March quarter, compared to 55.8% in the previous quarter, while the Worker Population Ratio (WPR) eased to 52.8% from 53.1%. The data, based on the current weekly status, covered people aged 15 and above who were unemployed but actively seeking work during the seven days preceding the survey.
The labour market data revealed significant gender disparities with female unemployment increasing to 5.3% in Q4FY26 from 4.9% in Q3, while male unemployment remained unchanged at 4.8%. In urban areas, female unemployment edged up to 9.1% from 9.0%, while urban male unemployment improved to 5.8% from 5.9%, leaving women facing significantly higher unemployment rates than men in both rural and urban India. Youth unemployment among those aged 15-29 rose to 15% in Q4FY26 from 14.3% in Q3, with male youth rates at 14% and female rates at 17.7%. The female labour force participation rate (LFPR) at the all-India level declined to 34.7% from 34.9%, while male participation declined to 77.3% from 77.6%. At the national level, India employed an average of 57.4 crore people aged 15 years and above during the quarter, including 40.2 crore men and 17.2 crore women.
Adding to employment concerns, Moody's Ratings has significantly revised India's economic outlook downward, cutting the 2026 GDP growth forecast by 0.8 percentage points to 6% due to weak private consumption, slower capital formation and industrial activity, along with higher energy costs. The rating agency also lowered the 2027 growth outlook to 6% from earlier estimates, citing lingering global and domestic pressures. As per Moody's, India is "particularly vulnerable" to high oil prices given its heavy reliance on imported crude and LNG, with the country importing about 90% of its energy requirements. The agency noted that India imports 60% of its LPG usage, of which 90% flows through the now-closed Strait of Hormuz, making it highly exposed to energy supply disruptions.
Among states and union territories, Chhattisgarh recorded the highest unemployment rate at 9.5%, followed by Jammu & Kashmir (9.3%), Punjab (7.7%), Uttarakhand (7.3%) and Kerala (7.2%). The survey covered 133,879 households and 561,822 people across rural and urban areas, with the data based on the current weekly status. Youth unemployment among those aged 15-29 rose to 15% in Q4FY26 from 14.3% in Q3, with male and female youth participation declining to 60.8% and 22.5%, respectively. The overall female LFPR remained broadly unchanged at 34.7% in the January-March quarter, compared to 34.9% in the previous quarter, with rural female LFPR standing at 39.2% down from 39.4% and urban female LFPR remaining nearly stable at 25.4% against 25.5% earlier.
The sectoral distribution of employment continues to exhibit a similar structural pattern, with the rural workforce predominantly engaged in the primary sector and the urban workforce concentrated in the tertiary sector. According to the survey, the share of workers engaged in agriculture stood at 41.1% during the March quarter, marking a decline from 58.5% in the previous quarter, while the share of employment in the tertiary sector rose to 33.7% from 20.6% in December quarter 2025. The secondary sector, along with mining and quarrying in rural areas, witnessed a rise from 20.9% to 25.2% in the March quarter. Self-employment, including own account worker & employer and contributing family worker, remained the dominant form of work at 55.8%, followed by regular wage/salaried employees at 25.5% and casual labour at 18.7%. The share of regular wage and salaried jobs increased to 15.5% from 14.8% in the previous quarter, while self-employment declined to 62.5% from 63.2%.
