India’s talent pipeline unprepared for AI-era demands

The report warns that India’s workforce could experience one of the largest disruptions in its modern economic history as artificial intelligence accelerates automation across service industries. Their findings show that India could either shed 1.5 million jobs by 2031 or gain more than four million new roles if the government, industry and education systems take immediate, coordinated action.

India’s position as the world’s IT and customer service powerhouse is at a crossroads, according to a major new report from NITI Aayog’s Frontier Tech Hub with expert contributions from senior leaders across IBM, Teleperformance, Infosys, Tech Mahindra, LTIMindtree, NITI Aayog and BCG.

The report warns that India’s workforce could experience one of the largest disruptions in its modern economic history as artificial intelligence accelerates automation across service industries. Their findings show that India could either shed 1.5 million jobs by 2031 or gain more than four million new roles if the government, industry and education systems take immediate, coordinated action.

The report, Roadmap for Job Creation in the AI Economy, lays out a nationwide plan for preparing India’s workforce for an AI-driven future. It calls for a mission-mode approach to talent development, arguing that India’s skilling ecosystem is too fragmented and slow-moving to withstand the seismic shift underway. The report positions AI as both a threat and an unprecedented opportunity: left unmanaged, India could lose global competitiveness; managed proactively, the country could become the world’s largest AI workforce supplier.

The study acknowledges that India’s IT sector is uniquely exposed to AI-driven disruption because of its scale, reliance on repeatable processes and dominance in global offshoring. But the authors also note that India is equally well-positioned to lead the age of AI, if it can mobilise a unified national strategy to build and redeploy talent at speed and scale.

AI is reshaping the nature of work faster than India's workforce can adapt

Generative AI has already entered the workflows of nearly every major firm, and its impact is no longer theoretical. Routine roles, especially those focused on scalable, repetitive tasks, are seeing the greatest displacement. Early career positions such as junior QA engineers, prompt-based customer support agents and L1 technical support staff are increasingly handled by automated systems that can perform tasks faster, more consistently and at lower cost.

The report argues that this shift is particularly acute in India because of the country’s long-standing competitive advantage in labour-intensive service processes. As AI takes over the most predictable segments of IT and BPM work, India’s foundational pipeline of entry-level talent is at risk. Without intervention, the country’s workforce could face a widening gap between outdated roles and the high-value capabilities global clients now demand.

However, the study also notes that AI is expanding the scope of high-order, specialised and interdisciplinary work. Demand is growing for roles such as AI safety testers, model evaluators, data governance specialists, sentiment intelligence analysts, synthetic data engineers, responsible AI auditors and LLM application designers. The report identifies more than 50 emerging roles across AI engineering, AI operations, AI ethics, applied AI development, and AI-enhanced domain expertise. Many of these roles did not exist five years ago.

Importantly, the report points out that India’s future workforce cannot rely solely on technical upskilling. The new AI economy requires hybrid competencies, human-machine collaboration, complex reasoning, domain-specific judgement, creative problem-solving, and data-informed decision-making. The study argues that India must shift from producing workers trained for predictable tasks to building a workforce skilled in roles that AI cannot easily automate.

A massive talent imbalance threatens India’s competitiveness in the global AI economy

The report examines whether India’s current workforce and education systems are capable of meeting projected AI-era talent demands. The authors conclude that India’s talent pipeline is dangerously misaligned with industry needs.

Despite India’s large graduate base, the study finds that AI and digital literacy remain limited across schools, colleges and vocational programs. AI curricula are inconsistent, outdated in many institutions, and often absent from engineering and non-technical courses. Most universities lack faculty trained in applied AI, and industry-academic collaboration remains sporadic. The report notes that even within engineering, students receive exposure to theoretical machine learning but little hands-on experience with generative AI systems or real enterprise use cases.

On the industry side, the report identifies a steep shortage of mid-senior professionals capable of leading AI transformation at scale. Companies are struggling to hire experienced AI engineers, domain-AI hybrid talent, and specialised roles such as model risk assessors or AI governance practitioners. The gap is creating fierce competition for a small pool of experts, driving up costs and forcing companies to look abroad for advanced capabilities.

At the same time, millions of India’s current service workers require reskilling to avoid displacement, yet India’s existing reskilling ecosystem is fragmented across corporate academies, private training platforms, and government programs. The report stresses that these efforts lack speed, global benchmarking, standardisation and national alignment.

One of the study’s most significant warnings is that a skills divide is emerging between workers who can adapt to AI and those who cannot. Without national coordination, India risks creating a two-tier workforce, one equipped to thrive in an AI-augmented economy and another facing rapid obsolescence.

The authors argue that India must approach AI talent development not as a sectoral initiative but as a mission-critical national project. In their analysis, India has just a few years to build a talent engine powerful enough to sustain global competitiveness in the AI era.

A national AI talent mission could unlock 4 million jobs across the next decade

The report further focuses on what India must do, now, to convert AI disruption into long-term job creation and economic competitiveness. The authors call for the launch of an India AI Talent Mission, a coordinated, government-led framework designed to unify skilling, innovation, education, industry partnerships and job creation under one national strategy.

The proposed mission includes several key pillars:

1. Transforming education systems at scale

The study recommends embedding AI literacy across school curricula, training teachers in AI fundamentals, upgrading university programs, and establishing specialised AI centres to produce advanced researchers and applied AI engineers. The authors stress that AI must become a foundational skill, not a niche technical track.

2. Creating a nationwide reskilling engine

To protect India’s existing workforce, the report calls for a multi-level reskilling framework that supports junior employees, mid-career professionals and those transitioning from at-risk roles. The mission would include micro-credentialing, fast-track programs, incentives for companies to reskill rather than replace workers, and national recognition of AI competencies.

3. Building a world-class AI R&D and innovation ecosystem

The report argues that India must invest heavily in compute infrastructure, shared datasets, open-source AI models, and public cloud credits to allow startups, researchers and SMEs to experiment without prohibitive costs. A national innovation grid would help decentralise AI innovation across states.

4. Strengthening global competitiveness and attracting AI talent

The study calls for policies that attract international AI experts, encourage global companies to build AI hubs in India, and position the country as the world’s largest supplier of AI-ready talent. India’s demographic advantage, English proficiency and technology services base give it a unique opportunity to dominate the global AI workforce market.

5. Aligning industry, academia and government under a single mission

The authors note that India’s current AI skilling landscape is fragmented. The proposed mission would synchronise curriculum design, faculty development, certifications, hiring frameworks, and long-term career pathways across all stakeholders.

In a nutshell, India stands at a decisive juncture. If the country mobilises a national AI talent strategy now, it could create more than four million new jobs, strengthen its position as a global technology leader, and establish itself as a primary talent partner for the world’s AI-driven industries. If India fails to act, it risks large-scale job losses, erosion of its IT leadership, and growing inequality across its workforce.