AI not displacing Indian IT jobs but helping in productivity, says study by ICRIER & OpenAI

Generative artificial intelligence (GenAI) is not causing mass job displacement in the Indian information technology (IT) industry, but is reshaping how work is organised, raising productivity and transforming roles, according to a study done by Indian Council for Research on International Economic Relations (ICRIER), and supported by OpenAI.

The study titled “AI and Jobs: This Time Is No Different” made an assessment of GenAI adoption in India and said the moderate hiring trends in the Indian IT industry is largely due the post-pandemic environment and cannot be attributed to AI adoption alone.

Today, there is a sense of panic especially in the stock markets about the impact AI & GenAI will have on the technology industry and this has led to steep decline in value in the share prices of the companies.

OpenAI Chief Economist Ronnie Chatterji said, “We are seeing a shift in how work is organized, where AI appears to be complementing human talent. This data offers a window into the transition underway in India. The focus now should be on the practical steps needed to help workers align their skills with the advancing capabilities of AI. Currently, only 4% of firms have trained more than half their workforce in AI, presenting a huge opportunity for growth.”

Contrary to the narrative that software developers and data administrators will be most impacted due to AI, the report that these two roles are experiencing strongest growth in demand indicates that GenAI is primarily functioning as a productivity-enhancing tool rather than as a substitute.

The study also found that 63% of firms report increased demand for candidates with both domain expertise and AI or data skills, pointing to a growing premium on hybrid skill sets as AI is integrated into core workflows.

Shekhar Aiyar, Director & Chief Executive, ICRIER said, “The results should reassure Indian policymakers without inducing complacency. While India’s IT sector appears to be managing AI adoption relatively well, many firms remain insufficiently prepared for what lies ahead.”

The study concludes that rising global demand for AI-enabled goods and services is likely to support net job creation in India’s IT sector over the medium to long term, even as roles and skill requirements continue to evolve. Taken together, the report indicates AI is reinforcing India’s IT sector as a source of productivity growth and evolving employment, rather than contraction. As firms integrate AI into core workflows, demand is shifting toward hybrid skill sets, pointing to a transition defined less by displacement and more by adaptation, as India’s digital economy scales.