A study by the Great Lakes Institute of Management reveals that one-quarter of India's labor force is highly exposed to AI disruption, with 11.4% facing potential job displacement. The findings highlight an urgent need for large-scale reskilling initiatives, particularly as generative technology impacts high-routine job roles for younger workers.
A new economic analysis from the Centre for Finance and Economic Research at the Great Lakes Institute of Management has highlighted the significant impact of artificial intelligence on the Indian labor market. According to the study, nearly 25% of India's workforce is currently highly exposed to AI-driven changes, presenting both challenges and opportunities for the domestic economy.
The findings, based on data from the Periodic Labour Force Survey, break down this exposure into two distinct outcomes. While 7.6% of the workforce is positioned to benefit from increased productivity through AI-led complementarity, 11.4% of workers face potential displacement risks. This shift underscores the duality of generative technology, which can either augment human output or replace routine tasks.
Sectoral vulnerability varies significantly across the economy. Agriculture and skilled trades, which account for over 54% of India’s working population, currently demonstrate low substitution risk from both AI and conventional automation. These sectors often rely on physical, non-routine interaction, which remains difficult for current AI models to replicate. In contrast, occupations characterized by high-routine tasks, which have seen growth since 2012, are the most susceptible to automation.
Younger workers are particularly vulnerable to this transition. Among the 15-24 age demographic, 39.4% are in roles with a high substitution risk. The ratio of high-routine jobs to complementary roles for this group is 7.6 to 1, which is notably higher than the 4 to 1 ratio seen in older demographics. This disparity indicates that entry-level roles may face the fastest evolution as firms adopt AI tools.
To navigate this shift, the report emphasizes the importance of policy focus and corporate strategy. States such as Maharashtra, Haryana, Kerala, and Tamil Nadu have higher concentrations of AI-complementary roles, which could serve as a baseline for future growth. The analysis suggests that large-scale reskilling programs, focusing on critical thinking, judgment, verification, and client engagement, are necessary to ensure the workforce remains relevant. As employment in high-routine roles continues to grow, the ability of policymakers and companies to integrate AI as a productivity tool rather than a replacement will be a key factor in long-term labor market stability.