Vocational education plays a pivotal role in enhancing employability, reducing skill gaps, and fostering economic development in emerging economies like India. Despite policy emphasis, the implementation of vocational education remains uneven across regions. This paper critically analyzes vocational education and skill development within the framework of the National Education Policy (NEP) 2020. The study adopts a qualitative, conceptual research design based on secondary data sources, including government reports and scholarly literature. The findings reveal that while NEP 2020 strongly advocates the integration of vocational education into mainstream schooling, challenges such as infrastructural constraints, societal stigma, lack of trained instructors, and weak industry linkages hinder effective implementation. The study contributes by integrating Human Capital Theory and Skill Development Theory to provide a theory-driven policy analysis of vocational education reforms in India. The paper concludes that effective implementation of NEP 2020 can significantly transform India’s vocational education landscape and support sustainable economic growth.