A Goldman Sachs report estimates Generative AI could automate 17% of tasks in India's non-agricultural workforce, with 12% of jobs at risk of replacement. However, the expansion of Global Capability Centres is expected to balance these losses by creating new roles and sustaining demand for digital services.
Generative AI is set to significantly transform India's employment landscape over the coming decade. According to a recent analysis by Goldman Sachs, the technology will likely redefine traditional roles, shifting the workforce toward higher-value and more strategic responsibilities.
Impact on Automation and Job Roles
The report highlights that 9% to 17% of tasks currently performed by the non-agricultural workforce in India could be automated. While 8% to 12% of existing jobs face a risk of being replaced by AI, a much larger segment of the workforce is expected to see their roles improved. The study suggests that 42% to 48% of positions will likely be augmented by AI, allowing employees to focus on complex decision-making and creative tasks that require human oversight.
GCC Growth vs. IT Services Challenges
For the Indian technology sector, the impact of AI is varied. While routine functions like basic software coding, testing, and business process outsourcing are increasingly being automated, the overall tech ecosystem continues to grow. A major driver of this resilience is the rapid expansion of Global Capability Centres (GCCs). India is now home to 2,117 GCCs, which together generate approximately $98 billion in annual revenue.
This growth in GCCs acts as a buffer against potential job losses seen in other areas of the IT sector. Data indicates that while India's six largest IT services firms collectively reduced their headcount by about 64,000 employees over the last three years, the broader technology services industry—led by the expansion of GCCs—added nearly 700,000 jobs during the same timeframe. This brings the total workforce in the tech services industry to approximately 4.4 million.
Investor Perspective on Tech Employment
Investors monitoring the Indian IT and digital services sector may track whether companies can successfully transition their employees from routine, repetitive tasks to high-end digital engineering and AI implementation services. The ability of firms to pivot toward these higher-value services will be a primary factor in maintaining profit margins and sustaining long-term growth. Furthermore, the continued establishment of GCCs by multinational corporations remains a key indicator of demand for India's digital engineering talent. The focus for stakeholders will be on how effectively large IT players manage their workforce transition and whether the growth in new-age digital roles can consistently offset the decline in legacy service contracts.