Artificial intelligence is reshaping how Indians work, where jobs are created and what skills employers value, according to the Economic Survey 2025–26, which says the impact on employment will depend less on job losses and more on how quickly workers and firms adapt.
The survey notes that India’s services sector, led by information technology and IT-enabled services, remains a key source of employment and external stability. Within this, Global Capability Centres (GCCs) have emerged as major employers, with more than 1,700 centres employing over 19 lakh professionals as of FY24.
However, the rise of AI is changing the nature of work. The survey highlights a structural shift in global demand towards productivity-enhancing solutions driven by generative AI, cloud computing, data engineering and cybersecurity. While this creates new opportunities, it also places pressure on workers to reskill.
Dr V Anantha Nageswaran, Chief Economic Adviser, echoed this emphasis on skills, saying, “A lot of us are concerned about how we will fare in the AI era. The good news is that employees actually still value soft skills, engagement, self-efficacy, working with others, adaptability and management skills matter a lot more than technological skills. But it's important, therefore, also to prepare our youth to look at areas which are not necessarily university education-driven, but could be vocational professional skills. In other words, we have to make vocational and technical and professional skills more fashionable and respectable than we have been doing so far.”
India’s technology workforce is relatively well-positioned. According to the survey, India ranks second globally in AI skill penetration, just behind the United States. Even so, weaker outcomes in broader information and communication technology (ICT) penetration and skill diffusion across firms and regions remain a concern.
Further, the survey cautions that AI adoption is not just a technology challenge but a labour one. As business models evolve, firms and workers must adapt to new roles that require higher-order skills, while routine tasks are increasingly automated.
At the same time, the expansion of AI infrastructure brings its own limits. The survey warns that large-scale AI data centres are highly energy- and water-intensive, and that indiscriminate scaling of computing capacity could strain power, water and financial resources. It argues that smaller, task-specific AI models and decentralised computing could offer a more balanced path, with implications for how and where jobs are created.
Industry experts say the changing role of GCCs will be central to how AI affects jobs in India. Ritika Loganey Gupta, Partner and GCC Sector Tax Leader at EY India, said: “The Economic Survey 2026 reinforces that India’s services surplus is structural, with GCCs playing a vital role in sustaining it."
"GCC-led software, BPM, consulting and fintech activities have evolved from cost-efficient delivery to integral components of global operations and innovation," she added.