Goldman Sachs suggests India may withstand AI-driven job displacement better than other economies due to the large share of physically demanding employment, with automation primarily impacting service sectors and offering productivity gains.
Goldman Sachs says India may be less vulnerable than some other major economies to artificial intelligence-led job losses because a large share of the country’s workforce still does physical or mechanical work. Construction and retail trade together account for about 40% of employment, and those activities are currently harder for AI to replace, according to the bank’s research.
The outlook is less reassuring in services, where AI is already being used to automate or support tasks. Finance, healthcare, education and business services could all see gains from wider adoption, but postal and telecommunications work, along with IT services and call-centre roles, face more direct substitution risk. Goldman Sachs Research chief economist Santanu Sengupta said the effect of AI will depend heavily on which tasks companies decide to automate and which they choose to augment.
The broader estimate from Goldman Sachs is that generative AI could automate roughly 9% to 17% of tasks performed by India’s non-agricultural workforce over the next decade. At the same time, the bank sees only about 8% to 12% of jobs as meaningfully exposed to substitution, while a much larger share, around 42% to 48%, is more likely to be complemented by AI, allowing workers to focus on higher-value work.
That distinction matters because the labour-market effects may be gradual rather than abrupt. Goldman Sachs says carefully sequenced adoption could lift India’s productivity by 0.4 percentage points over 10 years, and that the gains may outweigh job losses over a five-year period if businesses roll out the technology slowly enough for workers to adapt. Other recent reporting has also noted that global capability centres are expanding rapidly in India, helping to cushion the impact on employment even as the country’s largest IT services firms reduce headcount.
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