Hi,
It depends on the Employer.
Communication doesn't necessarily mean to talk fluently in English. According to me language is only a tool which we use to share our to thoughts to the receiver. So tool may be anything(any language). As long as you are able to share your thoughts vividly and clearly you are a good communicator. However English as language gained more importance due to its global presence. So if you want be part of big corporate group with or without international clients English communication will become mandatory. Also the term communication is not related to talking alone even your written skills is also equally important. So develop communications skills for a better career.
On the other hand if you got placed in a manufacturing sector (factory) or a Garment factory wherein unskilled laborers are involved vernacular language of that particular state will be sufficient to communicate with them.
So it depends on where you are going to get placed. Still it is always advisable to improve your communication skills in terms of English which will always help you.