The Data Defying the Narrative
The prevailing global conversation around artificial intelligence often centres on job displacement. Yet, a recent report from Nomura offers a compelling counter-narrative specifically for India. Between 2022 and August 2026, the country saw approximately
83,100 AI-related hires, starkly outpacing the 31,921 layoffs and attrition linked to the technology. This means for every job lost or impacted by AI, about 2.6 new ones were created. This net positive impact makes India a crucial 'ground zero' for understanding AI's real-world effect on employment, according to economists. The numbers suggest that, at least in the initial stages of this technological revolution, job creation is more than offsetting job destruction.
A Tale of Two Labour Markets
While the top-line numbers are encouraging, they mask a crucial underlying shift. The jobs being created are not direct replacements for those being lost. The Nomura report highlights that most job losses were in support teams, where roles are increasingly being handled by chatbots. Conversely, the hiring boom is concentrated in IT services, with firms specifically recruiting graduates for roles driven by AI demand. This is creating what economists call a two-tier labour market. Demand is falling for some entry-level workers who perform routine tasks, while it is soaring for experienced professionals who can blend AI expertise with business context. The workers being displaced by AI are rarely the same ones being hired for new AI roles, pointing to a significant challenge in transitioning the workforce.
The Great Skill Transformation
The real story of AI in India isn't about job quantity, but about job quality and skill transformation. Data from LinkedIn confirms the surge, with AI engineering roles growing by a staggering 51% year-on-year. However, this explosive growth comes with a catch: a massive skills gap. A NASSCOM report from earlier in the year highlighted that the demand for AI talent far outstrips the current supply. The skills required for existing jobs are changing rapidly, evolving by an estimated 12% every year in India. This means the primary challenge isn't a lack of jobs, but a lack of people with the right skills to fill them. Companies can no longer rely on the traditional 'hire-and-train' model for entry-level talent, as automation now handles many foundational tasks.
India's Unique AI Trajectory
Several factors make India's experience with AI unique. Its massive, educated workforce and long-standing dominance in the technology services and business process outsourcing (BPO) industries have positioned it at the forefront of this shift. For decades, India's economic advantage was built on a large pool of human capital performing tasks for global clients. As AI begins to automate some of that work, especially in finance and customer support, the country is simultaneously becoming a hub for higher-value AI development and implementation. This is evidenced by the rising share of overseas R&D hiring by US companies happening in India. The challenge and opportunity for India is to manage this rapid pivot from a manpower-heavy model to an efficiency-driven, AI-powered one.
