AI is rapidly transforming the global workforce, automating some tasks while reshaping how people work across industries.
India is unlikely to face widespread job losses from artificial intelligence (AI) in the near term, although some parts of the services sector could face greater disruption, according to Santanu Sengupta, Goldman Sachs’ Chief India Economist.
In a recent interview with Bloomberg Television, Sengupta said the impact of AI on India’s labour market could be more limited than in many other countries because a large share of the workforce is engaged in physical or mechanical tasks.
According to Goldman’s estimate, Construction and retail trade together account for about 40% of India’s workforce and are not being significantly “impacted by AI currently”
However, the services sector is seeing greater impact. But this could be minimized if AI adoption is appropriately sequenced. Goldman estimates that effective adoption could add about 0.4 % point to overall productivity over a 10-year horizon.
Sengupta said that, with gradual and appropriate adoption, productivity benefits could outweigh potential job losses over a five-year period.
Sengupta identified postal and telecommunications services and parts of the IT-services industry, particularly call-centre work, as areas facing “some substitution risks”. At the same time, parts of finance, healthcare, education and business services could benefit from AI adoption through productivity-enhancing applications.
Goldman Sachs’ July 28 report, “Gen-AI in India: Jobs Crosswinds, Productivity Tailwinds”, written by Goldman Sachs economists Santanu Sengupta, Arjun Varma and Andrew Tilton, provides a broader quantitative assessment of generative AI’s potential impact on India’s non-agricultural workforce.
The report estimates that GenAI could perform 9% to 17% of tasks currently undertaken by that workforce, depending on the technology’s capabilities.
Goldman estimates that 8% to 12% of non-agricultural employment faces substitution risk, while 42% to 48% could see their work complemented by AI.
The impact is expected to vary across occupations. The report’s occupational reallocation scenario points to the largest potential impact on clerical support and professional roles, each equivalent to about 3% of non-agricultural employment. Service and sales occupations could be affected at a level equivalent to roughly 2%, while technicians could account for about 1%.
Overall, the analysis suggests that AI is more likely to reshape India’s labour market through task automation, worker augmentation and occupational reallocation than through widespread job displacement in the near term.
However, the impact will not be uniform, with workers in routine and highly technology-sensitive service-sector roles remaining more exposed to substitution.
Also Read: AI Raises Risks for Jobs as Global Youth Unemployment Rises: UN Labour Agency
