India is emerging as a key test case for artificial intelligence's impact on employment, with AI-related hiring outpacing job losses according to a new Nomura Holdings Inc. report. The country recorded 83,100 AI-related hires during the period from 2022 through August 2026, compared with 31,921 layoffs and attrition, as reported by Nomura economists Sonal Varma and Si Ying Toh. The sheer scale of India's economy means it is experiencing the largest absolute impact from AI across layoffs, hiring freezes and recruitment, making it 'ground zero' for assessing the technology's effect on jobs. Most firing cases involve support teams replaced by chatbots, while most hiring cases are of IT-services graduates that firms explicitly credit to AI demand. The report, which examined 69 AI-related developments across Asia, found that AI-driven recruitment continues to be more than job losses in the country.
According to the Nomura report, the growing adoption of AI is producing a two-tier labour market in economies such as India and Korea. While demand for entry-level workers is weakening, employers are increasingly seeking experienced professionals with a stronger understanding of business operations. Across Asia, AI-related recruitment reached 130,758 positions during the study period, with more than 90% of those positions in technology. By comparison, 60,654 jobs were lost, about 60% of them in financial services. The World Bank's World Development Report 2026 had previously found that online job postings across South Asia fell by 1.6% following ChatGPT's release in late 2022, with the decline more pronounced among multinational companies and firms integrated into global value chains. However, Nomura's findings suggest that at least in the early stages of the AI revolution, job creation is more than offsetting displacement.
Despite the challenges, the World Bank estimated that fewer than one in 10 jobs in developing countries are susceptible to AI-driven automation, compared with more than one-third of jobs in high-income economies. By contrast, around one in six jobs in developing economies are expected to be enhanced by AI through productivity gains rather than replaced outright. The World Bank's Chief Economist, Indermit Gill, emphasised that since emerging economies are experiencing their lowest average economic growth in 30 years, AI represents an essential "lifeline" that they cannot afford to overlook. As noted by Gill, developing economies have more to gain and less to fear than wealthier countries, with impoverished nations potentially achieving a century's worth of growth in just ten years through modest, inexpensive localised technologies.
Citing data from an online freelance platform, the report showed that jobs outsourced to developing countries declined by 39% in 2025, with the steepest fall occurring in occupations most exposed to AI automation. Sectors such as call centres, customer support, data processing, and back-office services, which have underpinned growth in countries such as India and the Philippines, could come under pressure as AI becomes capable of performing more office and knowledge-based tasks. As noted in the report, these sectors have supported economic growth in developing economies over the past two decades. The report, however, said the overall figures conceal the uneven impact AI is having across the workforce, creating distinct groups of beneficiaries and those adversely affected.
The World Bank recommended that developing countries prioritise the widespread adoption of smaller, task-specific AI applications that can improve productivity across sectors, including agriculture, healthcare, education, and public administration. The report highlighted examples from India where AI is already delivering tangible benefits, citing AI-based weather forecasting in Telangana that helped small farmers save as much as $560 per farmer by improving agricultural decision-making. As noted by World Bank senior vice-president Indermit Gill, developing countries should focus on adapting existing technologies to local languages, institutions, and business needs rather than building frontier AI models. Nomura cautioned that while their findings suggest AI is creating more jobs than cutting in India, the aggregates do mask distributional pain as displaced workers rarely transition to AI engineering roles. Meanwhile, Infosys co-founder Nandan Nilekani emphasized that India is well positioned to capture significant productivity gains from AI over the coming decade, with the country becoming the 'AI use case capital of the world' through applied AI solutions accessible to a billion Indians.
