Is India’s IT Sector Thriving Amidst the GenAI Shift?

Synopsis

Discover how India's IT sector is adapting to the rise of Generative AI. This report reveals shifts in hiring trends and the increasing necessity for hybrid skill sets. Explore the implications for the industry's future and how companies are responding to these changes.

Key Takeaways

Generative AI is reorganizing workflows in India's IT sector.

Entry-level hiring has seen a modest decline.

Mid and senior-level hiring remains stable.

63% of firms demand hybrid skill sets.

AI is enabling efficient scaling without significant job cuts.

Mumbai, Feb 14 (NationPress) Generative AI is not leading to significant job loss in India’s IT sector but is instead reorganising workflows, enhancing productivity, and creating a demand for hybrid skill sets, according to a report released on Saturday.

The document from the Indian Council for Research on International Economic Relations (ICRIER) and OpenAI indicates a slight decline in entry-level hiring, while mid and senior-level recruitment has remained stable. It also highlighted that productivity improvements attributed to AI outnumber any declines by a factor of 3.5 to 1 across various business sectors.

"Companies are witnessing a moderate slowdown in hiring, primarily at the entry level, while mid and senior levels remain stable. This trend aligns with broader post-pandemic dynamics in the IT field and isn't solely due to AI implementation," stated the report.

On average, divisions that are experiencing increased output while maintaining or reducing team sizes outnumber those with productivity losses by a ratio of 3.5 to 1, the report noted.

The findings, based on a survey of 650 IT firms across 10 cities, revealed a growing demand for candidates with a blend of domain expertise and AI or data skills, with 63% of firms indicating a heightened need for such hybrid profiles.

More than half of the firms surveyed reported already facilitating AI adoption through training and awareness programs, with an additional 38% planning to implement similar initiatives.

Nearly one-third of business divisions noted both increased output and reduced costs, demonstrating that AI is facilitating more efficient scaling without proportionate job cuts.

“These findings should provide reassurance to Indian policymakers without leading to complacency. While India’s IT sector seems to be adapting to AI integration effectively, many companies still lack adequate preparedness for future challenges,” said Shekhar Aiyar, Director & Chief Executive of ICRIER.

The report highlighted that only 4% of companies have trained more than half of their workforce in AI over the past year. Major challenges include the scarcity of qualified trainers, high costs, uncertain returns, ethical and legal issues, and organizational readiness.

aar/pk

Point of View

It is vital to recognize that while the report indicates a positive adaptation of India's IT sector to AI integration, ongoing vigilance is essential. The evolving landscape demands continuous investment in skill development and strategic planning to ensure the workforce is prepared for future demands.

NationPress

9 May 2026

Frequently Asked Questions

Is Generative AI causing job losses in India's IT sector?

No, the report indicates that Generative AI is reorganizing work rather than causing widespread job displacement.

What skills are in demand due to AI integration?

There is a rising demand for candidates with a combination of domain expertise and AI or data skills.

How many firms are supporting AI adoption?

More than half of the surveyed firms are already facilitating AI adoption through awareness and training initiatives.

What challenges do companies face in AI adoption?

Key challenges include finding qualified trainers, high costs, and concerns about ethical and legal issues.

What is the overall outlook for India's IT sector in relation to AI?