In an environment of immense opportunities for economic growth and despite its demographic dividend and increased literacy levels, India faces youth unemployment as a major challenge for labour market policy. Young job seekers make up 49 per cent of the total unemployed in India. With 93 per cent of the available work provided by the informal sector, a significant number of well-educated youth are either unemployed, underemployed or coping with insecure work arrangements. The author identifies the main causes of youth unemployment in the country and discusses the main challenges to combat it.