AI Boosts India’s Tech Hiring Despite Job Displacement, TechGig

Artificial intelligence (AI) is transforming India’s workforce at an accelerated pace, creating a complex employment landscape. While AI is currently generating substantially more job opportunities than it displaces, a significant friction point exists as the workers losing their jobs typically lack the skills for the newly created positions.

According to a report by Nomura, accessed by Bloomberg News, India recorded 83,100 AI-related hires against 31,921 layoffs and attrition directly linked to the technology. This translates to approximately 2.6 AI-related hires for every job lost or impacted, highlighting a net positive in job creation.

India: Ground Zero for AI Employment Impact

Nomura economists Sonal Varma and Si Ying Toh analyzed 69 employment-related cases across Asia from 2022 to August 2026. Their findings position India as the single largest contributor to both AI-driven hiring and job displacements within the region.

The economists describe India as “ground zero” for understanding AI’s impact on employment, a status derived from its vast workforce and heavy reliance on technology services and business-process outsourcing (BPO).

India’s historical competitive advantage in managing software testing, data processing, and customer support with a large pool of educated workers is now being rewritten by AI. Automated chatbots are increasingly replacing customer support teams, while IT services firms are simultaneously recruiting engineering graduates to meet rising AI demands.

The Growing Skill Disconnect

A critical disconnect highlighted by the report is that displaced customer-support representatives cannot seamlessly transition into AI engineering roles. These new positions require specialized degrees, advanced technical skill sets, and years of experience.

This shift threatens to disrupt the traditional entry-level career path for Indian graduates, where basic roles historically served as training grounds.

Businesses are moving away from mass hiring and extensive post-onboarding training, instead prioritizing candidates who already possess specialized AI expertise.

Nomura warns that this trend is creating a two-tier labor market in India, with soaring demand for experienced professionals and shrinking opportunities for entry-level workers. This dynamic reflects a broader regional trend across Asia, where over 90% of AI-related hires occurred in the technology sector.