This study explores employability in Indian higher education, focusing on bridging the skill gap between academic outputs and industry needs. Employability, distinct from employment rates, encompasses skills, knowledge, and attributes that prepare graduates for workforce success. In India, where the services sector drives more 50 percent of GDP, demand for skilled labor is high, yet graduate employability remains a challenge. This paper examines the employability landscape in Indian higher education, analyzing trends, domain-wise and gender-wise employability, regional variations, and the skill gap between education and industry needs. Data from the India Skills Reports (2015–2025) and other sources reveal a gradual improvement in employability, particularly in technical fields driven by digital transformation and government initiatives like the National Education Policy (NEP) 2020 and Skill India Mission. The paper that shows employability has been rising from 38.12 percent in 2016 to 54.81 percent in 2025, reflecting progress, though many graduates lack job-ready skills. Technical fields like management and engineering lead in employability, while traditional degrees lag. States such as Maharashtra and Kerala excel due to targeted skilling initiatives, and women’s employability, though declining in 2025, remains notable. Despite a vast education system, the focus on engineering and management has skewed professionalization, neglecting broader skill development. The paper has examined this imbalance and advocates for quality-focused reforms, vocational integration, and inclusive strategies to leverage India’s demographic dividend. Aligning higher education with a dynamic global labor market is essential for economic and social advancement.