Is artificial intelligence taking away jobs or is it leading to hirings? A new report by Nomura suggests that in India, AI is creating more jobs than cuts. India, long regarded as the global back office for multinational companies, is becoming an important barometer for measuring artificial intelligence’s impact on employment.According to the report by Nomura Holdings Inc, AI-driven recruitment continues to be more than job losses in the country. Given the country’s vast workforce, India is experiencing the “largest absolute impact” of AI across layoffs, hiring freezes and recruitment.This makes it “ground zero” for evaluating how the technology is reshaping employment, Nomura economists Sonal Varma and Si Ying Toh said in a report which examined 69 AI-related developments across Asia, most of them occurring between 2022 and August 2026.According to Bloomberg, the report found that India added 83,100 AI-related jobs during the period, compared with 31,921 positions lost through layoffs and attrition.“Most firing cases are support teams replaced by chatbots, while most hiring cases are of IT-services graduates that firms explicitly credit to AI demand,” the economists reportedly said.
Two-Tier Job Market in India
According to the report, the growing adoption of AI is producing a two-tier labour market in economies such as India and Korea. While demand for entry-level workers is weakening, employers are increasingly seeking experienced professionals with a stronger understanding of business operations, the economists added.
India Sees More AI-related hiring than job losses
Across Asia, AI-related recruitment reached 130,758 positions over the study period, with technology accounting for more than 90% of those hires.During the same period, 60,654 jobs were lost, of which roughly 60% were in the financial services sector.According to the economists, these findings “runs counter to the narrative of massive job losses due to growing AI adoption” and indicate that, in the initial phase of the AI revolution, employment creation has more than compensated for worker displacement.They said the trend is visible not only in major economies such as India and China, but also in the Philippines, where business process outsourcing is a significant contributor to the labour market.The report, however, said the overall figures conceal the uneven impact AI is having across the workforce, creating distinct groups of beneficiaries and those adversely affected.“Since displaced workers rarely transition to AI engineering roles, the aggregates do mask distributional pain,” the Nomura economists wrote.Nomura also noted that the analysis should be viewed as an indication of broader labour market trends rather than a measure of absolute employment, since Asia’s labour markets remain fragmented and the study relied on news reports.
Nandan Nilekani sees productivity gains from AI
Meanwhile, Infosys co-founder and chairman Nandan Nilekani on Thursday said India is well positioned to capture significant gains in productivity and inclusion from artificial intelligence over the coming decade, even though the country currently has limited presence in semiconductors, AI infrastructure and large language models (LLMs).Speaking at the India Policy Forum, Nilekani said India’s biggest opportunity lies in applying AI at scale rather than competing in foundational technologies.“It’s in the area of applied AI, that India will become a leader. We will become the AI use case capital of the world because we will actually deploy AI and make it useful, not just for a few businesses or a few people, but make it accessible and useful to a billion Indians. Applying AI to change the lives of Indians and population scale, just like we did with DPI (digital public infrastructure), is really where it’s going to go,” he said.Nilekani, who also serves as chairman of think tank NCAER, said artificial intelligence is likely to have a significant impact on employment at large companies, while suggesting that smaller businesses are better positioned because many of them operate as single-person enterprises.According to him, future job creation is likely to be driven increasingly by small businesses rather than large corporations.
Leave a Reply