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AI and Jobs: This time is no different

Author

Listed:
  • Deepak Mishra

    (Indian Council for Research on International Economic Relations (ICRIER))

  • Mansi Kedia

  • Aarti Reddy

Abstract

This study examines the employment implications of generative AI in India's IT sector. Drawing on a survey of 651 IT firms across 10 Indian cities conducted between November 2025 and January 2026, it finds no evidence to support apocalyptic predictions of large-scale job losses following AI adoption. Instead, the results point to a fairly modest though broad-based moderation in hiring, concentrated primarily at the entry level. Occupations most exposed to AI—particularly technical and analytically intensive roles—are found to experience the strongest growth in demand. Consistent with this pattern, software-related divisions have seen the least moderation in employment relative to other business functions. A majority of firms also report productivity gains in the form of higher and better-quality output, along with time and cost savings. Overall, the evidence suggests that the generative AI revolution is not fundamentally different from earlier general-purpose technologies, which reduced costs, expanded markets, and generated net positive employment opportunities. Taken together, these findings indicate that rising global demand for AI-enabled goods and services should support significant net job creation in India's IT sector. These conclusions, however, may warrant reassessment if the scope of generative AI use expands dramatically or if artificial general intelligence and smart humanoids are deployed at scale.

Suggested Citation

  • Deepak Mishra & Mansi Kedia & Aarti Reddy, 2026. "AI and Jobs: This time is no different," Indian Council for Research on International Economic Relations (ICRIER) Report 26-r-06, Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India.
    • Handle: RePEc:bdc:report:26-r-06
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    References listed on IDEAS

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