How will AI impact India's white-collar job market?
Technical or domain expertise will also play a key role in determining how easy or hard it will be for AI to replace a job or task. A working paper looking at ChatGPT usage by consultants at Boston Consulting Group (BCG), a leading consultancy (published in 2023) offers us some more guidance on understanding this impact. The study was conducted on a group of consultants as they went about their daily tasks (involving creative, analytical, writing and persuasion skills), with only some of them using ChatGPT.
An assessment of the quantity and quality of their work showed that, on average, those using ChatGPT were 25 per cent faster and produced 40 per cent better quality results. While this underlines the potential for the use of AI in knowledge work, the paper also highlights that by making current best practices available to all, AI can change the terms of evaluation of work, and consequently boost the value of tasks that fall in a machine's blind spot, i.e. that can only be done by humans.
For example, a consultancy, or any other knowledge-based company, will need humans to guide the machine, to make sense of vague instructions, to negotiate a deal, manage an angry client or motivate team members. A new study published by METR, a US-based AI research company, in 2025, supports our thinking by concluding that current AI tools struggle with lengthy and messy workflows.
While knowledge jobs may not all be fully automated, businesses will expect workers to use AI to boost productivity. This means businesses can either use AI to do the same amount of work with fewer employees and maximize profits, or they can use AI to do more work with the same number of employees and boost revenues as well.
The former is more likely during economic slowdowns and the latter during economic boom periods. We have also seen in the past couple of decades that the hiring and layoff trends in the country have closely followed boom and bust cycles in the West. We saw mass layoffs in India's outsourcing services sector following the US housing market collapse in 2008 but also saw jobs flourishing in the recent pandemic-powered tech boom.
At the same time, if AI is able to replace certain roles or parts of them, new roles will be created in the wake of this disruption—the WEF expects AI to lead to an over 25 per cent net addition of jobs. But those are likely to be specialized roles for workers with deep domain expertise or persuasive communication, problem-solving or other social and behavioural skills. This may increase entry barriers for jobs and competition in the labour market, and it is worth asking if the Indian labour market is well positioned to make the most of those changes. Probably not…
A survey of colleges in India found that in 2024, just over 51 per cent of the country's youth had employable skills. Unsurprisingly, those with MBA and computer science degrees were the most 'employable', while BA and BCom graduates were the least. To us, this suggests an impetus to update these 'less employable' courses to offer more employable skills as against a call to abandon these streams of education altogether. The BA and BCom courses offer skills crucial for society, the economy and businesses, and we doubt the technology and management sector will be able to employ all of India's graduates if they were all to pursue those avenues.
Finally, governments also have a big say in drawing the boundaries within which technology is used. In the UK, the Industrial Revolution had a rough start with initial attempts at mechanizing the textile industry in the seventeenth century. This was resisted by workers as well as the monarchy. However, over time, as the influence of the textile workers on policymakers diminished, there was a change in approach, leading to a crackdown on the Luddite riots, which were attempts to halt technological progress in the early nineteenth century. In 2023, the then-CEO of Stability AI was reported stressing on the role regulations will play in deciding the impact of AI. He added, countries with strong labour laws, such as France, are unlikely to see a significant loss of coding jobs while outsourced coders in India will lose their jobs. We don't necessarily agree with his assessment of the impact on Indian jobs, but he is right in addressing regulations as a major driver (more on this in Chapter 12).
While all the factors mentioned above will influence how many jobs in India are lost to machines, the crucial point is that India is already grappling with a shortage of well-paying, white-collar jobs that must be addressed— AI or no AI.
Excerpted from Enter Prompt: Navigating AI in the World's Largest Democracy by Barsali Bhattacharyya and Sidharth Sreekumar with permission from Penguin Random House India
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