Generative artificial intelligence (Gen-AI) is set to reshape India's labour market by augmenting workers rather than replacing them, with 42–48 per cent of the country's non-agricultural workforce expected to use AI as a productivity tool, according to a Goldman Sachs analysis released on 29 July. The findings push back against fears of mass technological unemployment, projecting a more nuanced transformation of how Indians work.

Key Findings from the Report

According to the Goldman Sachs analysis, Gen-AI could automate 9–17 per cent of tasks currently performed by India's non-agricultural workforce, depending on the pace of technological advancement and assumptions about task complexity. Crucially, only 8–12 per cent of jobs face meaningful substitution risk — a figure significantly lower than the share expected to benefit from AI-led productivity gains.

Santanu Sengupta, Goldman Sachs Research's chief economist, said: 'Gen-AI could perform 9–17 per cent of the tasks currently undertaken by India's non-agricultural workforce, depending on assumptions about the level of task complexity that it can perform.'

Sectors Most and Least Exposed

Knowledge-intensive industries are expected to gain the most. Healthcare, education, media, and financial and professional services stand to benefit significantly, given their dependence on information analysis, content creation, and decision-making — all areas where Gen-AI has demonstrated strong capability.

In contrast, manufacturing, construction, and mining face lower direct disruption, as their workflows are anchored in physical activity and machine operations that remain difficult for AI to replicate. Clerical support roles carry the highest substitution risk within the workforce, followed by select professional, technician, and customer-service positions.

Productivity Gains Over the Next Decade

The report projects that AI adoption could lift India's annual labour productivity growth by approximately 0.4 percentage points over the next decade. If AI capabilities advance faster than currently anticipated, that figure could double to 0.8 percentage points — a meaningful boost for an economy seeking to sustain high growth rates.

Most occupations, the report notes, are likely to blend AI-executable tasks with activities requiring human judgement, creativity, and physical skill — suggesting a collaborative rather than adversarial relationship between workers and AI systems.

IT Sector: Concerns May Be Overstated

The report also addresses anxiety surrounding India's technology services industry, arguing that headline job-loss numbers obscure a broader positive trend. While the country's six largest listed IT services companies reduced headcount by approximately 64,000, the wider technology ecosystem — including Global Capability Centres (GCCs) — added nearly 700,000 jobs over the past three years.

This divergence suggests that even as large IT firms restructure, demand for technology talent is being absorbed and expanded elsewhere in the ecosystem, particularly through multinational GCC operations scaling up in India.

What This Means Going Forward

The Goldman Sachs findings arrive as Indian policymakers and businesses grapple with how to position the country's large workforce in an AI-driven global economy. The report's relatively optimistic outlook — centred on complementarity over substitution — could inform skilling policy and sector-specific AI adoption roadmaps. Whether India captures the productivity upside will depend on the speed of AI integration, investment in reskilling, and the regulatory environment shaping enterprise adoption.