AI and Jobs in India: The reality is more balanced than you think

The report directly confronts the common belief that AI will cause mass unemployment. Many may think that even though the public discourse is full of sensational claims regarding the elimination of workers by the AI, the ICRIER study did not identify any mass layoffs in the Indian IT sector yet. Generative AI does seem to be transforming work and improving productivity instead of eliminating large numbers of workers, however.

As noted by Ronnie Chatterji, Chief Economist at OpenAI, “We are seeing a shift in how work is organised, where AI appears to be complementing human talent. This data offers a window into the transition underway in India.” This implies that in the near future AI is not a wholesale replacement of human workers but instead a tool that complements them.

AI hiring trends in India: Entry-level moderation, demand for skills

This reflects changing AI hiring trends in India, especially for AI and IT jobs in India where skill requirements are shifting.” Among the major discoveries is the changing trends in recruiting, especially at the entry level. Most of the surveyed companies claimed that there has been a slight reduction in entry-level staffing, but mid and senior-level recruitment has been consistent. Researchers also note that the appearance of this moderation is also in line with the general post-pandemic trends in the IT sector and cannot be fully explained by the adoption of AI.

Simultaneously, the report reports an increase in the desire to find hybrid skills in the use of domain skills and AI or data skills. More than two-thirds of the companies that surveyed indicated that they are increasingly seeking staff with specialisations in data analysis or AI as they incorporate generative AI into their daily business operations.

This change shows that AI is changing the attributes desired by employers. Instead of simply getting rid of employees, companies are focusing on those that can collaborate with AI-based products, cope with AI-supported tasks, and interpret outputs produced by intelligent applications.

Indian IT sector’s AI adoption: Productivity gains and output expansion

The data suggests that AI productivity in India is rising, especially across the Indian IT sector’s AI adoption efforts. Not only is generative AI influencing the type of employees businesses are recruiting but it is transforming the way work is completed. In thousands of business units mostly impacted by AI, the productivity improvements continue to far exceed the decreases. According to the report, more divisions increased their output and reduced their costs than underperforming ones, indicating that with AI, more efficient scaling is supported without the corresponding loss of jobs.

AI upskilling in India: The real challenge

This highlights the urgent need for AI upskilling in India to prepare workers for the future of jobs in India’s tech sector. Nevertheless, an important place of concern of the report is the preparedness of the workforce. Although more than 50% of the companies surveyed have implemented AI awareness or introductory programs, few, about 4%, have taught over fifty percent of their employees AI-related competencies. What it means is that upskilling and reskilling preparedness are disproportionate at the organisational level with high training costs, unqualified trainers, and unpredictable returns cited by the firms as the main obstacles.

The narrow scope of training implies that lots of workers might not be prepared to go entirely with the shifts in the demands of the AI-enhanced workplace. Although such positions as software developers and database administrators are still highly demanded, the skills demanded in these jobs are also changing at a fast pace.

What this means for AI and jobs in India

Simply put, the report recommends that AI is changing jobs more than it is destroying them. What is being experienced instead of job collapse is the restructuring of jobs towards work of a higher value and higher skill. Position vacancies with simple or repetitive duties are not growing as quickly as those demanding administration, analysis, and improvement of AI results.

To the IT workforce in India, it implies that becoming and remaining employable will require more and more constant learning and acquisition of skills that are complementary to AI. Companies would also have to invest more in training and systematic workforce planning in case they would be interested in enjoying the productivity returns of AI without abandoning their staff.

Comprehensively, the ICRIER-OpenAI report provides a more grounded and data-driven approach that does not exaggerate the forecasts with the actual experience of firms that are at the frontline of the AI adoption. This is not the future of work in the Indian tech sector, rather it is an adjustment to a new reality. Overall, the findings suggest that AI and jobs in India are evolving together rather than moving in opposite directions.