According to Venugopal Garre, Managing Director and India Head of Research at Bernstein, artificial intelligence adoption in India will boost productivity but reduce net new job creation, particularly in white-collar roles. As reported by CNBC TV18, Garre stated that in three to four years, you essentially probably would start to see that impact with respect to wage deflation as more people seek jobs which are not available. The slowdown in hiring will not be confined to IT services but will instead cut across a wide range of white-collar work, potentially eventually weighing on consumption. It's still too early to take a call on how that shapes up, Garre noted, emphasizing the uncertainty around the full employment impact of AI adoption.
According to Bernstein's analysis reported by CNBC TV18, India is among the top users of AI globally by usage, not just user count, ranking second after the United States when China is excluded from the comparison. Garre attributed this largely to the dominance of US large language models in current usage data. The impact of AI adoption on employment will depend on how companies choose to deploy productivity gains, through share buybacks and investor payouts, reinvestment into new growth, or lower prices for products and services. This ranking reflects India's significant adoption of AI technologies despite the employment challenges they may create.
As reported by CNBC TV18, Bernstein's view on markets has not shifted much over the past six to seven months. After the April-June 2026 quarter fall, there were expectations of modest positive returns for the year, with the Nifty ending flat near 26,000. However, that target now looks difficult to reach given current levels, though Garre is holding on to it. He flagged that gains from government policy actions in the first half, particularly around consumption, may not repeat in the second half as year-on-year comparisons get tougher. The market faces challenges from an unstable oil and West Asia backdrop and a heavy pipeline of fundraising in India, which could pressure overall market valuations.
According to Bernstein's sector perspective reported by CNBC TV18, the firm has shifted toward quick commerce and away from some traditional retail names. Garre pointed to execution track record and reduced fundraising competition among smaller players as factors supporting the quick commerce space, while noting that quick commerce still has room to expand through new dark store additions. The shift reflects a preference for business models less dependent on India's broader consumption growth, as quick commerce growth is likely to weigh on physical retail in urban areas over time. The financial sector remains among the top themes, with improved liquidity that could support credit growth.
As reported by CNBC TV18, return dispersion across stocks is at its widest in years, meaning gains are increasingly concentrated in individual stock picks rather than broad market moves. This represents a significant shift from previous market dynamics where returns were more broadly distributed across the market. The heavy pipeline of fundraising in India could pressure overall market valuations, while an unstable oil and West Asia backdrop adds to market uncertainty. These factors collectively create a challenging environment for sustained market growth, with investors increasingly focused on individual stock performance rather than broad market movements.
