A Net Positive in Job Creation
The most striking finding from recent data is that AI is, for now, a net job creator in India. A new report from Nomura, analysing employment cases from 2022 to August 2026, found that for every one job lost or impacted by AI, roughly 2.6 new AI-related
roles were created. Specifically, India saw 83,100 AI-related hires against 31,921 layoffs and attrition linked to the technology. This trend runs directly counter to the widespread fear of AI leading to large-scale job destruction, suggesting the initial stages of AI adoption are driving more hiring than firing. Economists at Nomura have even dubbed India "ground zero" for understanding AI's employment impact, given the country's huge workforce and reliance on tech services.
The Crucial Catch: A Skills Mismatch
While the top-line number is positive, it hides a critical friction point: the people losing their jobs are rarely the same ones being hired for new AI roles. The data shows a clear pattern where jobs involving routine tasks are being displaced. Many of the documented job losses were in customer support, where teams are being replaced by automated chatbots, and in banking back-office operations. Conversely, the new jobs being created are for highly skilled positions like AI application developers, data scientists, and machine learning engineers. The challenge is that a displaced customer support representative cannot seamlessly transition into an AI engineering role, creating what economists call "distributional pain" even when the overall job count increases.
A Two-Tier Labour Market Emerges
This skills gap is creating a two-tiered labour market in India. There is a clear decline in demand for entry-level workers who traditionally handled routine tasks that are now being automated. An ICRIER survey noted that 55% of IT firms reported a decline in entry-level hiring. Companies are shifting away from mass hiring and on-the-job training for junior roles, instead prioritising candidates who already possess specialised AI expertise. This puts immense pressure on fresh graduates and diminishes the traditional entry ramp into the IT industry. Simultaneously, demand for experienced and senior workers who can blend technical AI skills with business understanding remains incredibly strong, pushing up salaries for qualified professionals.
The Imperative of Reskilling and Upskilling
The data makes it clear that the central challenge for India's workforce isn't fighting against AI, but adapting to it. The conversation is rapidly shifting from job replacement to skill augmentation and transformation. Industry bodies like NASSCOM and firms like TeamLease Digital have highlighted the urgent need for upskilling. Reports indicate that the share of job postings mentioning AI has consistently increased, and organisations are focusing on redesigning job roles around new AI capabilities. The government has also initiated programs like 'FutureSkills PRIME' to retrain the IT workforce. The demand-supply gap for talent is significant, with some reports noting a shortage of experienced AI professionals despite high demand, underscoring that the future of work depends on continuous learning and building a future-ready workforce.
