More Jobs Created Than Lost
Contrary to fears of mass unemployment, artificial intelligence is currently a net job creator in India. A recent report from Nomura highlighted that for every job lost or impacted by AI, roughly 2.6 new AI-related roles are being created. Between 2022
and August 2026, India saw approximately 83,100 AI-related hires against 31,921 layoffs linked to the technology. This trend positions India as a crucial case study for AI's global impact on employment. However, the data also reveals a critical friction point: the skills required for the new roles are often vastly different from those of the jobs being displaced, signaling a major workforce transition rather than a simple one-for-one replacement.
The New High-Demand Skillset
The demand for specific AI skills is surging, creating a significant talent gap that companies are scrambling to fill. According to LinkedIn CEO Dan Shapero, AI engineering roles in India are growing by 51% year-on-year. Job portals and industry reports show a consistent demand for professionals skilled in Machine Learning (ML), Generative AI, Natural Language Processing (NLP), and MLOps. Python and SQL remain foundational skills, but expertise in areas like LLM fine-tuning and AI agent design now commands premium salaries, with a NASSCOM report noting a 17x demand-to-supply gap for certain advanced roles. This scarcity has made AI and ML specialists some of the most sought-after professionals, commanding salary hikes of 30% or more.
Beyond the Tech Sector
While the IT sector is the epicenter of AI hiring, the technology's influence is spreading rapidly across all industries. The banking, financial services, and insurance (BFSI) sector, for instance, has become a major recruiter for AI talent, using it for fraud detection, risk management, and operations. Similarly, Global Capability Centres (GCCs) for retail and consumer companies are expanding their AI workforce to handle data analytics, supply chain management, and customer functions. This cross-sector adoption means that AI literacy is no longer a niche requirement for tech roles but is becoming a core competency for a growing number of professionals, even in non-technical fields.
A Fundamental Shift in Hiring
The rise of AI is also fundamentally changing how companies hire. There is a clear pivot from volume-based recruitment to skill-first strategic hiring. Major IT firms are reducing their 'bench strength'—the practice of keeping paid employees in reserve for future projects—from 20-30% down to single digits, instead focusing on just-in-time hiring for specialised skills. This shift places a greater emphasis on demonstrable abilities over academic credentials. Employers are increasingly looking for candidates with project portfolios and real-world experience, with some reports noting that 80% of leaders would hire a less experienced candidate with AI skills over a more experienced one without them.
The Challenge of Upskilling
The primary challenge facing India is not a lack of jobs, but a widespread skills mismatch. Industry body NASSCOM estimates that India will need over a million AI-skilled professionals by 2026, yet the supply of qualified talent is lagging far behind demand. Reports suggest that a majority of the workforce feels anxious about AI's impact and lacks confidence in their skills, with most learning happening through informal, self-driven channels. This has created a talent shortage so acute that 82% of Indian employers report struggling to find the talent they need, a gap that threatens to slow innovation and project delivery. To address this, organizations like NASSCOM and government initiatives like Skill India are promoting AI-focused training programs.
