A Net Positive, But Not the Whole Story
On the surface, the latest data is encouraging. According to a recent report from Nomura, India has seen 83,100 new AI-related hires, compared to 31,921 job losses due to attrition and layoffs linked to the technology. This creates a net gain of over
51,000 jobs, suggesting AI is a job creator, not a destroyer. For every job impacted by AI, approximately 2.6 new ones are being created. This finding runs counter to the prevailing narrative of mass unemployment. However, these top-line figures mask a much deeper, more complex transformation happening within the Indian workforce. The country, described as “ground zero” for understanding AI's employment impact, is not just seeing a change in job numbers, but a fundamental shift in the very nature of work.
The Two-Tier Labour Market
The core issue is that the jobs being created are not for the same people who are losing them. The Nomura report, which analysed cases between 2022 and August 2026, highlights the emergence of a two-tiered labour market. The job losses are concentrated in roles that involve routine, repetitive tasks. Think back-office banking operations, customer support teams being replaced by automated chatbots, and junior-level quality assurance testing. These were often entry-level positions that provided a crucial first step on the career ladder for many graduates in India's massive business process outsourcing (BPO) and IT services sectors. An ICRIER survey cited in the report found that 55% of IT firms reported a decline in entry-level hiring.
Where the New AI Jobs Are
Simultaneously, there is a hiring boom for specialised, high-skill roles. Over 90% of the new AI-related jobs across Asia are in the technology sector. Companies are actively recruiting for positions like AI engineers, data scientists, and machine learning specialists who can build, implement, and manage the new AI systems. This demand is so significant that India alone accounts for the largest share of both AI-related hires and job losses in Asia. The problem is, a displaced customer service representative cannot simply step into an AI engineering role without significant retraining. This disconnect creates what economists refer to as “distributional pain”—while the overall numbers look positive, specific segments of the workforce face significant disruption.
The Great Skill Shift
This situation underscores a critical challenge for India: the widening skills gap. The traditional 'hire-and-train' model, where companies recruited fresh graduates in large numbers and trained them on the job, is becoming obsolete. Today, businesses are prioritizing candidates who already possess specialized AI expertise. This puts immense pressure on the workforce and the education system. According to NASSCOM, the demand for AI-related jobs in India is projected to cross one million by 2026, but the talent pool isn't keeping pace. Lifelong learning, upskilling, and reskilling are no longer corporate buzzwords but an economic necessity. The skills in demand are not just technical, like Python or machine learning, but also include analytical thinking, strategic problem-solving, and AI literacy for all roles.
