How India can catch the AI upside?

• NITI Aayog released a ‘Roadmap for Job Creation in the AI Economy’ on October 10. 

• The roadmap examines how Artificial Intelligence is reshaping the tech services industry through the lens of work, worker, and workforce. 

• AI might just be the single largest technology revolution of our lives, with the potential to disrupt almost all aspects of human existence. 

• India’s tech services sector — strategically vital to the economy, employing 13 per cent of the total workforce and over 30 per cent of the white-collar talent — stands on the frontline of AI disruption.

• It faces significant risks, but also unprecedented opportunities that could redefine its global competitiveness.

• A report said, by mid-2025, almost 78,000 tech employees had lost their jobs due to AI (that is roughly 500 people every day).

• On the other hand, research at Stanford, which studied customer support teams, concluded that when human agents were given AI assistance, productivity jumped, customer satisfaction improved, as did employee retention, and no jobs were cut. 

• Thousands of data annotators, prompt engineers, AI trainers, safety testers, and ethicists have been hired – roles unheard of before the advent of AI.

• As of 2023 , the Indian tech services industry employs 7.5-8 million individuals. 

• If we do not react to the situation in front of us proactively and immediately, then we risk losing 1.5 million jobs.

• However, if the industry, along with the Indian government and academia, can get its act right promptly, then by 2030, we can add two million more new jobs.

• Similarly, the Customer Service (CX) sector employs 2 to 2.5 million. Non-action can take the headcount down to 1.8 million. At the same time, right actions can take this up to 3.1 million.

• Whether our industry is a net employer, or a net loser of jobs depends on the actions we take.

Mechanics of disruption

• It is easy to fall into the trap of viewing AI’s impact as a simple story of automation and job loss. This fear is not new.

• This is not a new fear. In the 15th century, the printing press disrupted the jobs of scribes and monks who copied manuscripts, triggering fears of obsolescence and even social unrest. Instead, the printing press gave rise to millions of new jobs for editors, writers, printers, bookbinders, paper manufacturers, teachers, and librarians. 

• Textile automation transformed the jobs of handweavers and artisans into roles in mass fashion, global trade, textile engineering, and the modern retail industry. 

• And in more recent times, one remembers labour strikes in India when computerisation was introduced — there was fear of job losses for typists, filing clerks, and mailroom workers. 

• Instead, India has been at the forefront of the entirely new industries that have emerged around software, e-commerce, digital marketing, social media, cybersecurity, Internet of Things (IoT) and now AI.

Three critical challenges

• The implications of AI for the tech services sector encompass both risks and opportunities. India is at a cross-roads, and AI’s impact on the job market needs immediate attention. 

There are three critical challenges:

1) The first is the sheer scale of the job displacement risk unfolding in the sector. According to data from the Centre of Advanced Study in India, over 60 per cent of formal sector jobs in the country are susceptible to automation by 2030. This is particularly so in the IT and BPO sectors. According to a survey, about half of the workers fear AI’s impact on their jobs. 

2) The second reason pertains to problems with India’s talent pipeline. At the grassroots level, India’s computer science education is uneven. It is only offered in some schools, limiting early exposure. In China and Russia, in contrast, computer science is mandatory at primary and secondary levels. India also lags the rest of the world in AI publication citations and AI patents, according to data published by the 2025 AI Index Report.

3) The third reason is that there is a critical supply-demand gap for AI talent. Supply for AI talent is now 50 per cent of the current demand in India, and is expected to further lag in the next few years, according to a NASSCOM report published in 2024. The Indian AI talent demand is expected to grow from 800,000-850,000 to over 1.25 million over 2024-26, while existing talent is only growing at 15 per cent. What makes this even more challenging is the fact that India is not among the top destinations for global AI talent, with a net negative talent migration (-1.55 per 10,000). This stands in stark contrast to several Asian counterparts such as Saudi Arabia, Singapore, Hong Kong, and the UAE, which have a positive net talent migration figure.

Global scenario

• In 2019, Saudi Arabia government spelt out its AI ambition with the launch of the Saudi Data & AI Authority, which eventually promoted the theme ‘data is the new oil’. The oil-backed economy has set its sights on a transformation that would make it one of the top 15 AI nations globally by 2030. In a country of about 35 million people, over 779,000 have already been trained in AI. Not just that. The government has established AI offices across 23 ministries, and targeted over $20 billion in investment into AI infrastructure and ecosystem, supporting over 300 startups. 

• There are more examples from Asia itself. Singapore, for instance, has funded more than a 100 AI projects ($250,000 per project), trained over 200 engineers with a 95 per cent placement rate. 

• And the UAE houses the world’s first dedicated AI university, and has trained over 500 AI graduates from over 40 countries. 

• Governments aren’t just pushing on the policy front, but also supporting funding and the establishment of ecosystems.

• China, one of the leaders in the AI race, has built two national AI labs, producing trillions of parameter models, and focused on AI R&D. 

• As far as academia goes, China integrated AI into its high school curriculum as early as 2022. It has an ambitious plan to make AI literacy universal by 2030.

• In the US as well, NSF-backed AI-curriculum for K-12 classes has been adopted in multiple states already.

Indian govt’s initiatives to boost AI program

• The Indian government’s flagship AI program is the IndiaAI Mission with over Rs 10,000 crore outlay. It seeks to invest in datasets, startups, and responsible AI use. 

• The establishment of AI Centres of Excellence in agriculture, health, and smart cities marks a step forward, but remains a work in progress. 

• The much-anticipated Rs 2,000 crore India Startup Fund does not have specific criteria for AI building startups. 

• In academia, while the CBSE AI curriculum and Atal Tinkering Labs (ATL) AI modules have introduced AI learning in schools, the rollout has been uneven, and there is a shortage of trained teachers. 

• The risk of job losses and a fragile pipeline of available talent present a grim picture of India’s tech industry’s immediate future. 

• If India is to lead in AI, it must build an academic pipeline for advanced research and innovation. Today, that pipeline is dry. Most AI degrees are confined to a handful of top-tier institutions, leaving the vast majority of engineering and science colleges without structured AI departments or curricula.

How India can catch the AI upside?

• Building an AI-ready workforce requires a concerted effort across government, academia, and industry.

• To achieve this, the NITI Aayog proposes a unified ‘India AI Talent Mission’.

• It will be a nationally coordinated, all-of-government initiative focused squarely on equipping India’s workforce for the AI age. 

• An integrated, mission-mode approach is now essential to unify fragmented initiatives under one national banner, with clear goals, accountability, and execution. 

• The India AI Talent Mission must act as that central anchor — bridging industry, academia, and government efforts — and ensuring they move together at the speed and scale that this transformation demands.

This mission should be anchored on three foundational pillars:

i) Embedding AI fluency across all levels of the education system, from schools to universities.

ii) Building a globally attractive AI talent magnet by positioning India as a premier destination for AI skills.

iii) Launching a massive AI skilling engine to reskill and upskill the current workforce at scale.

For the remaining two — the India AI Talent Mission should work in collaboration with the IndiaAI Mission. 

iv) Establishing India open-source AI commons.

v) Operationalising a federated national compute and innovation grid.

• These pillars are critical enablers for India’s AI talent strategy because they provide the open data, benchmarks, and compute infrastructure needed to turn trained talent into innovators and researchers. 

• Without them, India risks losing skilled professionals abroad. With them, we can retain top talent, foster indigenous innovation, and secure long-term competitiveness.

• Only a unified, urgent, and mission-driven response can turn the looming threat of disruption into a generational opportunity for India.