AI Creates More Jobs Than Cuts in India: Nomura Report

A new report by Nomura suggests that artificial intelligence may be creating more jobs than it’s cutting in India. This challenges the conventional wisdom that AI is a job killer, raising questions about the impact of technology on employment.

The numbers appear to support this claim. According to the report, between 2022 and August 2026, India added 83,100 AI-related jobs while losing 31,921 positions through layoffs and attrition. However, these figures conceal a more complex reality.

The emergence of a two-tier labor market in economies like India and Korea is highlighted by the report. Demand for entry-level workers is weakening, while employers are increasingly seeking experienced professionals with a stronger understanding of business operations. This bifurcation raises important questions about who benefits from AI adoption and who gets left behind.

The impact of AI on employment varies across industries and sectors. Technology accounted for more than 90% of AI-related hires, but the financial services sector bore the brunt of job losses, with around 60% of those lost positions occurring within this industry.

The report also notes that the overall figures conceal “distributional pain,” meaning while aggregate employment numbers may look rosy, there are likely significant pockets of workers who have been displaced by AI and struggle to transition into new roles. This is a crucial consideration as policymakers navigate the implications of AI on employment.

Infosys co-founder Nandan Nilekani’s comments at the India Policy Forum offer an interesting counterpoint to this narrative. While he acknowledges that AI will likely have a significant impact on large companies, he suggests that smaller businesses are better positioned to benefit from the technology because many operate as single-person enterprises. This highlights the potential for AI to create new opportunities in small and medium-sized enterprises.

However, Nilekani’s assertion also raises questions about India’s preparedness for the changing job market. While applying AI at scale will be a major opportunity for the country, there are significant challenges to overcome – including limited presence in semiconductors and AI infrastructure, as well as large language models (LLMs).

The Nomura report highlights the need for a more comprehensive understanding of how AI affects employment in India. As policymakers grapple with the implications of this technology, they must consider both the aggregate numbers and the distributional effects – and take steps to support workers who may be displaced or struggling to adapt.

In the coming months, companies will likely invest heavily in AI adoption, while governments respond to the changing employment landscape. But for now, the report serves as a reminder that the impact of AI on jobs is complex and multifaceted – requiring a thoughtful and nuanced approach if India is to truly capitalize on its potential.