According to a Goldman Sachs report, generative artificial intelligence (Gen-AI) could automate up to 17% of tasks currently performed by India's non-agricultural workforce, with the actual impact depending on technology evolution speed. The investment bank estimates that 42-48% of India's non-agricultural employment is likely to be complemented by AI, while only 8-12% of jobs face meaningful substitution risk. As reported by Goldman Sachs, this means AI is more likely to enhance jobs than eliminate them, reshaping how Indians work over the next decade by automating repetitive tasks and allowing workers to focus on higher-value activities. The report emphasizes that AI will take over repetitive tasks, letting people focus on more creative or high-impact work, especially in healthcare, education, and finance sectors. Under its baseline scenario, around 13-15% of tasks are exposed to AI automation, with the impact varying significantly across sectors. Recent developments show Google's inaugural AI & Economy ATLAS report, based on 15 million interactions, finds AI is used across 68% of occupations but complete task automation accounts for less than 10% of interactions, supporting the complementary nature of AI adoption rather than widespread job replacement.
The report reveals significant variation across sectors in AI exposure, with healthcare, education, media, and financial and professional services expected to benefit the most as AI assists workers with diagnostics, analytics, research and other knowledge-intensive tasks. By contrast, routine business-process work, including post and telecom services, is more vulnerable to substitution because of its concentration of repetitive and codifiable tasks. According to Goldman Sachs economic analyst Santanu Sengupta, exposure is concentrated in services, with healthcare, education, and financial services appearing more exposed to AI-related augmentation through diagnostics and data analytics, while IT-enabled business-process services face greater substitution risk. Healthcare has around 83% of tasks classified as complementary, while financial services show about 68% complementary tasks. Construction, manufacturing, and mining remain less directly exposed because task content is still more physical in nature. Recent Google findings show AI is commonly used for diagnostics, troubleshooting and real-time learning rather than replacing hands-on tasks, with automotive technicians and industrial mechanics using AI to interpret complex test results, identify electrical wiring problems and inspect machinery for wear, where multimodal AI usage is more than twice the overall workplace average.
The report projects a shift in occupational composition rather than broad-based job losses, with employment declines expected to be concentrated among clerical support workers (around 3% of non-agricultural employment), followed by professionals (3%), services and sales workers (2%), and technicians (1%). At the same time, physical occupations could see employment rise by around 4%, followed by craft and trade-related workers (3%) and plant and machine operators (2%), as manual and interpersonal tasks remain difficult to automate. The analysis suggests it is important to have augmentation before substitution, as the main risk for India is that if substitution arrives too early (and before adoption), the economy could face a period of weak employment growth before productivity gains broaden out. For India's technology sector, the findings challenge the narrative that AI will sharply reduce employment. While routine coding, software testing, documentation and business process services are increasingly vulnerable to automation, the broader technology ecosystem continues to expand, supported by multinational companies setting up global capability centres (GCCs) and growing demand for digital engineering and AI implementation. Recent Google data shows AI adoption does not increase uniformly with expertise - while high-income workers with specialised skills are among the most frequent users, the technology is used more often for tasks requiring low- to mid-level expertise than for those demanding the highest level of expertise.
Goldman Sachs projects that AI could raise India's annual labour productivity growth by around 0.4 percentage points every year over the next decade in its baseline scenario, with the impact ranging from 0.1 to 0.8 percentage points depending on AI capabilities. The report identifies media, education, and healthcare as expected to see the largest productivity gains. Despite concerns about AI impact on India's IT outsourcing industry, Goldman Sachs notes that the broader technology ecosystem has added around 700,000 jobs over the past three years, taking total employment to 4.4 million. The report points out that if India keeps investing in digital infrastructure (think data centers, affordable computing capacity, reliable electricity and water), the country could see an economic boost. Recent Google findings support this productivity focus, showing that the largest gains are likely to come from using AI to automate routine tasks, improve decision-making and help employees focus on higher-value work, with companies increasingly using AI to help employees analyse information, improve workflows, generate ideas and handle repetitive work.
The report identifies infrastructure as India's biggest constraint rather than skills, with India accounting for only around 1% of global data centre capacity compared to 47% in the US and 25% in China. According to Goldman Sachs, scaling AI adoption will require substantial investment in computing infrastructure, electricity, and data centres. The report notes that beyond usual dependence on global ICT spending, a more restrictive policy environment around cross-border data and digital services could weigh on services export growth, with the EU tightening scrutiny of cross-border data transfers and the US emphasizing AI sovereignty. The report also warns that increasing protectionism in major export markets, including restrictions on cross-border data flows and AI deployment, could pose risks to India's services exports. India now hosts 2,117 GCCs generating nearly $98 billion in revenue, with the report noting that employment reductions have largely been confined to India's six largest IT services firms, which together cut about 64,000 jobs over the past three years, while the rest of the technology services industry-including GCCs-added nearly 700,000 employees during the same period. Recent Google data shows AI use varies widely across occupations - around 30% of occupations use AI in at least a quarter of their tasks, while 11% use it in half of their tasks, with only 3% using AI for at least three-fourths of their tasks.
