Artificial intelligence is changing workplaces worldwide fast and millions of jobs may soon be replaced by automation.
But India may not suffer the most, according to Goldman Sachs. Its latest analysis suggests that while AI will change the Indian workforce, a larger proportion of jobs may be better than worse.
AI can complement more Indian jobs than it replaces
Goldman Sachs estimates that 8% to 12% of India's non-agricultural employment could face substitution risks from generative AI.
However, the report also estimates that 42% to 48% of non-agricultural jobs could be complemented by AI, meaning workers may use the technology to improve productivity rather than being replaced by it.
This distinction is crucial. AI can take over repetitive jobs like processing information, preparing regular reports, analysing records and working in standardised processes while leaving employees to decide, communicate and do more complex work and are responsible for decision-making.
Goldman estimates that around 9% to 17% of tasks performed by India's non-agricultural workforce could be exposed to AI-driven automation, depending on how capable the technology becomes.
Services sector faces greater exposure
India’s large services industry is expected to see more disruption as many jobs are computer-based and repetitive tasks.
Financial services, education, media, professional services and business-process operations are among the areas where AI could have a significant impact.
We do not actually mean mass unemployment. In fact, we could redesign jobs, reduce repetitive tasks and expect people to handle more complicated work.
By contrast, sectors that require substantial physical activity may be less exposed. Construction, for example, has relatively low task exposure because many responsibilities still require physical presence and human intervention.
Productivity could be India’s advantage
One reason Goldman Sachs sees a less severe employment shock is the possibility AI will boost productivity. Generative AI could add around 0.4 percentage point to India’s annual labour productivity growth over the next decade under its baseline scenario.
Higher productivity will help businesses grow, create new opportunities and create new types of work. Technology may thus revolutionize the nature of work as much as it eliminates workers.
And the transition will still be challenging
India is not completely protected from AI-driven job losses. Routine jobs particularly in technology-enabled services and back-office operations could come under significant pressure.
Recent developments in India’s IT and banking sectors already show companies increasing automation and adjusting workforce strategies.
The biggest challenge could be ensuring workers have the skills for an AI-supported economy. Those who can work alongside AI, interpret its output and combine technological skills with human judgement may have an edge.
For India, Goldman Sachs' message is cautiously optimistic: AI may remove some jobs but will add far more jobs than it replaces.
How well the country is able to reskill workers and create new ones will determine whether the AI transition is dangerous to employment or productive.
