Generative AI is poised to transform India's labour market over the next decade, redefining job roles and accelerating the shift toward higher-value work, according to a new Goldman Sachs report. The study projects that GenAI could automate 9-17% of tasks currently performed by India's non-agricultural workforce, but the net employment impact may be cushioned by the rapid expansion of global capability centres (GCCs).
Key Findings on Automation and Augmentation
The report, covered by TNN in the Times of India, breaks down the potential effects on jobs. It estimates that 8-12% of jobs face a meaningful risk of substitution by AI, while 42-48% are more likely to be augmented by AI, allowing workers to focus on more complex tasks. The table below summarises the projected impact:
| Category | Percentage of Non-Agricultural Workforce |
|---|---|
| Tasks automatable by GenAI | 9-17% |
| Jobs at meaningful substitution risk | 8-12% |
| Jobs likely to be augmented by AI | 42-48% |
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 GCCs and growing demand for digital engineering and AI implementation.
Global Capability Centres as a Buffer
GCCs are expected to play a crucial role in cushioning the employment impact. According to the report, India now hosts 2,117 GCCs generating nearly $98 billion in revenue. The report notes 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.
In contrast, the rest of the technology services industry — including GCCs — added nearly 700,000 employees during the same period, taking the total headcount to about 4.4 million. This divergent trend underscores how GCCs and smaller tech firms are absorbing talent displaced by automation and restructuring at major IT outsourcers.
The Goldman Sachs analysis highlights that while GenAI will reshape job roles and task composition, the net effect on employment may be less severe than feared, particularly if the growth of GCCs and digital engineering services continues at the current pace.
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