Artificial Intelligence (AI) is rapidly transforming India’s job landscape, promising both unprecedented opportunities and significant challenges. With AI projected to contribute $500 billion to India’s GDP and influence a workforce of 500 million, the impact on employment, skills, and entrepreneurship is profound and multifaceted.
The AI Impact on Indian Employment: Displacement and Empowerment
AI’s dual effect on jobs in India is striking: while it is expected to create new opportunities, it will also displace many traditional roles. Industry leaders and experts agree that AI will not simply increase employment numbers but fundamentally alter how economic value is distributed.
Raghav Gupta, Founder-CEO of Futurense, highlights that AI is lowering the barriers to starting businesses by reducing resource requirements. This democratization could boost entrepreneurship and exports, enabling small and micro businesses to flourish with fewer resources. However, Gupta cautions that most workers may face displacement rather than empowerment, making government interventions like universal basic income increasingly important.
This displacement, while not necessarily catastrophic, demands a rethinking of career paths and social safety nets. Unlike past technological revolutions, AI’s pace and scale could outstrip traditional job creation mechanisms, necessitating new approaches to workforce management and social policy.
Sector-Wise Job Creation and Transformation
Information Technology and Software Development
The Indian IT sector is a major beneficiary of AI-driven growth. According to NASSCOM, approximately 1 million AI-related jobs are expected to be added by 2025. Around 80% of Indian IT firms plan to hire new AI talent, reflecting the sector’s rapid adaptation to AI technologies.
Global tech giants like Google are expanding AI research facilities in India, particularly in Bengaluru, creating hundreds of specialized roles in AI research and development. These roles range from AI model development to data science and AI ethics.
Manufacturing and Industrial Automation
AI’s integration into manufacturing is projected to create up to 950,000 new jobs by 2030, according to McKinsey Global Institute estimates. Indian companies like Tata Motors are already deploying AI-powered robotics, which opens new roles in robotics maintenance, AI system management, and industrial AI applications.
The Indian government supports this shift through initiatives aimed at training 1 million people in AI skills, particularly focusing on manufacturing and industrial sectors.
Emerging AI-Adjacent Roles
Beyond traditional sectors, new job categories are emerging that did not exist a few years ago, such as AI trainers, prompt engineers, and digital content moderators working alongside AI systems. These roles are growing rapidly and require specialized skills in AI model validation, ethics review, and compliance monitoring.
The Skills Revolution: From Degrees to Practical Abilities
A critical transformation accompanying AI adoption is the shift in employer preferences from formal degrees to demonstrable skills. Gopal Sharma, COO of PhysicsWallah, points out that Indian employers increasingly value skills over academic credentials, opening doors for millions without college degrees—provided they have access to relevant training.
This shift challenges the traditional education model focused on theoretical study. Instead, practical, hands-on learning aligned with industry needs is becoming essential. Mobile technology and affordable data connectivity make scalable training possible, but integrating real-world applications through partnerships between educational institutions and industry is crucial.
For workers and students, this means embracing a mindset of continuous learning and adaptability to keep pace with rapidly evolving AI capabilities.
Challenges: Job Displacement, Reskilling, and Social Equity
Despite AI’s promise, there are significant concerns about job displacement, especially in white-collar sectors. Surveys indicate that 68% of white-collar Indian workers expect AI to partially or fully automate their jobs within five years. For example, fintech companies like PhonePe have already reduced customer support staff by 60% due to AI automation.
Globally, AI is predicted to displace millions of jobs but also create even more new roles. However, a major bottleneck is reskilling: only about 36% of displaced workers worldwide have successfully transitioned into new AI-influenced jobs. Companies like Amazon and IBM have invested heavily—over $1.2 billion collectively—in reskilling programs focusing on cloud computing and AI fluency, but scaling such initiatives remains a challenge.
Additionally, AI adoption may exacerbate social mobility issues by narrowing entry-level opportunities and intensifying competition for skilled roles, especially as companies outsource or expand operations in lower-cost regions like India.
Key Takeaways for Job Seekers and Policymakers
- AI will reshape jobs rather than simply eliminate them: New roles in AI development, maintenance, and ethics are emerging rapidly.
- Skills matter more than degrees: Practical, hands-on training aligned with industry needs is essential for employability in an AI-driven economy.
- Entrepreneurship opportunities expand: AI lowers barriers to starting businesses, potentially democratizing business ownership.
- Reskilling is critical: Large-scale, accessible training programs must be prioritized to help displaced workers transition.
- Social safety nets need rethinking: Policies like universal basic income may become necessary to address displacement impacts.
India stands at a crossroads where AI could either widen inequality or fuel inclusive growth. The outcome depends on how effectively education, industry, and government collaborate to harness AI’s potential while mitigating its risks.
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Original article: ET Soonicorns Summit 2025: How AI will reshape Indian jobs