The Transformer: How AI Is Reshaping Jobs, Skills and the Future of Work in India

Over a relatively short period, India has witnessed rapid growth in the adoption of artificial intelligence (AI). The Nasscom’s—the advocacy group for the information technology (IT) firms—AI Adoption Index indicates that 87 per cent of enterprises are actively using AI solutions to improve productivity, customer service and decision-making. With the domestic AI market projected to grow exponentially to more than $131 billion by 2032, AI is poised to transform the structure of work across sectors.

The future of work in India is, therefore, unlikely to be a simple case of job losses. Instead, India’s growing AI readiness is more likely to accelerate workforce restructuring, drive productivity enhancement and generate new forms of employment across both the formal and informal sectors. In this context, AI adoption is likely to emerge as a significant engine of economic growth and employment generation in the country

Trends indicate that Indian IT companies are increasingly integrating AI into routine business operations—given the competitive advantages associated with AI adoption—even as the sector has witnessed layoffs, restructuring and slower hiring linked to automation. New recruitments in the sector are increasingly linked to AI-related skills. AI adoption is also growing across India’s start-up ecosystem, banking, healthcare, manufacturing, education, logistics and agriculture.

A large segment of Indian start-ups, for instance, are increasingly building consumer products in education, healthcare, governance, finance and customer support—using foundational AI models from OpenAI, Meta and Google. Much like cloud-computing platforms that enabled companies to scale without investing in expensive physical infrastructure, foundational AI models today provide the “intelligence layer”, while start-ups and service providers are focusing on deployment, innovation and market-specific solutions. This ecosystem could potentially create greater opportunities for new forms of white-collar employment—driven by creativity, adaptability, product development and domain-specific problem-solving.

Concerns Over Transition

These trends do raise important questions about the future of work. With nearly 371 million people between the ages of 15 and 29, India has one of the world’s largest youth populations. Concerns about the impact of AI on work are significant for the country’s nearly six-million-strong IT workforce, as well as for the rest of the workforce, particularly when the aspect of skilling and workforce transition is considered.

Recent studies by the Anthropic and the BCG, a consultancy, suggest that occupations built around repetitive, rules-based and precedent-driven tasks face the highest exposure to automation. In contrast, work involving creativity, judgement, emotional intelligence, physical interaction or strategic reasoning remains relatively resistant to substitution.

As such, computer programmers, customer-service representatives, data-entry operators, marketing professionals and financial analysts are among occupations most exposed to AI-led disruption. On the other hand, AI product managers, growth-strategy managers, agricultural workers, those in food services, transportation, construction and courtroom client representation are some of the job roles that remain relatively resistant to automation.

Employment Trends and Sectoral Shifts

The Future of Jobs Report 2025, published by the World Economic Forum, identifies analytical thinking, AI and big data among the most sought-after skills; with the top-largest growing jobs being in agriculture, logistics, software and applications development, food processing, health care and education, to name a few. The larger challenge, however, will be to ensue that these jobs are productive, sustainable and better paying.

According to the Periodic Labour Force Survey, a majority of the Indian workforce in 2025 was engaged in agriculture (43 per cent), followed by trade and hotels (13 per cent), manufacturing (13 per cent), services (13 per cent), construction (12 per cent), and transport, storage, and communications (6 per cent). Employment growth in India has been driven by the services and the construction sectors, along with manufacturing and micro, small, and medium enterprises. Emerging sectors such as start-ups, gig and platform work, and global capability centres have also contributed significantly in recent years. Future job creation is expected to continue across these sectors, while consumer retail, the care economy, hospitality, education, health-care and tourism are projected to further support employment growth.

The important question is how AI will impact job creation in these sectors. Agriculture is unlikely to experience severe adverse employment effects from AI. Instead, AI could strengthen productivity through scientific farming inputs, better supply-chain management and improved alignment between cropping patterns and changing consumption demand. Agristart-ups, climate-smart cropping systems, predictive monitoring tools, digital public infrastructure for credit and data access and blockchain-enabled traceability for agricultural products hold the potential to create more meaningful and productive jobs.

In infrastructure, logistics and trade, AI may generate new roles across technical, managerial, and operational functions—leveraging digitised supply-chain data, mapping efficient logistics networks, identifying optimal locations for multimodal transport hubs and supporting the planning and analysis of economic and trade corridors.

The growth of gig and platform work is also likely to accelerate as employment becomes increasingly digital, flexible and project-based. Generative AI could further expand India’s digital content economy by creating new opportunities for creators, marketers, designers, coders, educators and consultants serving both domestic and international markets.

An important dynamic likely to drive employment comes from a prediction by the CEO of Microsoft, Satya Nadella, posted on X last year: “Jevons paradox strikes again! As AI gets more efficient and accessible, we will see its use skyrocket, turning it into a commodity we just can’t get enough of.” The quote captures a broader economic argument: cheaper, more efficient AI will expand demand rather than contract it, as services become more competitive and accessible. In the Indian IT services sector, for instance, AI-enabled reduction in costs and turnaround time may drive growth from customers—both domestically and across the Global South—generating additional employment opportunities in near-shoring, SaaS (software as a service) adoption or software outsourcing.

The prospect of AI fully eliminating the need for human labour in the Indian context appears distant as new business models and professions will continue to emerge—including around “enterprise AI”, which is about supporting businesses to deploy AI for operational efficiency. In this context, India’s domestic market itself will generate huge opportunities. Concerns on entry-level jobs being eliminated may also ease as companies realise the need to maintain sustainable talent pipelines essential for long-term organisational capacity.

Human oversight roles will also remain critical for monitoring risks associated with the deployment of advanced AI systems. For instance, risks to financial systems surrounding advanced AI models such as Mythos reinforce the continuing importance of human supervision, technical expertise, risk mitigation and sound decision-making

Preliminary evidence suggests that AI is more likely to function as a powerful productivity multiplier and an engine of economic growth rather than as a complete substitute for human labour. India’s ability to ride the AI wave gainfully will depend on policy aligning the skill ecosystem with emerging realities and preparing business leadership to manage a smooth transition. The future of work in India may therefore depend less on whether AI replaces jobs and more on how effectively the country prepares both its businesses to utilise AI and its workforce to work alongside it.

(Views expressed are personal)

Sumita Dawra is former Union Labour & Employment Secretary