Goldman Sachs predicts minimal broad job losses in India due to AI, citing the country’s labour market composition and potential productivity gains amid sector-specific shifts.
India is unlikely to suffer broad job losses from artificial intelligence, although some service-sector roles are expected to feel the strain, Goldman Sachs’ chief India economist Santanu Sengupta said on Friday. Speaking to Bloomberg Television, Sengupta argued that India’s labour market is less exposed than many others because a large share of workers remain in manual or physical occupations rather than tasks that can be automated quickly.
Construction and retail together account for about 40% of India’s workforce, and those areas are not yet being materially disrupted by AI, according to Sengupta. The more immediate pressure is expected in services, especially functions that rely on repetitive digital work. Goldman estimates that if AI adoption is phased in carefully, productivity gains could outweigh job losses over the next five years and add about 0.4 percentage points to overall productivity over a decade.
The bank’s research suggests that generative AI could automate 9%-17% of tasks performed by India’s non-agricultural workforce, with 8%-12% of jobs facing meaningful substitution risk. At the same time, 42%-48% of roles are likely to be augmented rather than replaced, meaning workers would use AI to handle routine work and focus on higher-value tasks. Exposure is greatest in services such as education, media, financial services and professional services, while construction is relatively insulated because of its physical nature.
There is also a split within the technology industry itself. Goldman-linked reporting cited by Indian media outlets says routine coding and software testing are among the functions most vulnerable, while global capability centres, or GCCs, may soften the blow by expanding work for multinational firms in India. The Times of India reported that India now hosts 2,117 GCCs generating nearly $98 billion in revenue, even as the six largest domestic IT services firms have cut about 64,000 jobs over the past three years. Outside that group, the broader technology services sector, including GCCs, has added nearly 700,000 employees.
Sengupta also said India’s economy has held up better than Goldman expected despite the shock from higher Middle East tensions and imported oil costs. He pointed to resilient demand, record vehicle sales, stronger credit growth and double-digit goods and services tax receipts. On inflation and interest rates, he said the Reserve Bank of India may begin raising rates later this year if core price pressures stay firm, although he described any tightening cycle as shallow.
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