The adoption of generative artificial intelligence (AI) has the potential to reshape 38 million jobs in India, delivering a 2.6% productivity boost to the Indian economy through gains in the organised sector, according to a report by EY India.
The report estimates that 24% of tasks across industries can be fully automated, while an additional 42% of tasks can be augmented with AI, freeing up 8–10 hours per week for knowledge workers.
“Building talent pipelines and prioritising upskilling must be at the forefront of every organisation. By fostering public-private collaborations and investing in talent development, India can also become a global hub for AI-skilled talent,” said Rajiv Memani, chairman and CEO of EY India.
At an industry level, the largest productivity gains are anticipated in the services sector due to its higher labour share in gross output. Manufacturing and construction sector may see a comparatively smaller impact from AI adoption.
According to the report, skills shortages remain as a significant barrier in AI adoption. Only 3% of Indian enterprises possess sufficient in-house talent and resources to make the most of what AI has to offer, while the remaining 97% of executives cite lack of talent as a primary hurdle, the report said.
Further, out of the 15% of Indian enterprises that report having GenAI workloads in production, only 8% (about half) report being able to fully measure and allocate AI costs. The report highlights the need for a systematic means to predict the costs of, and measure the impact of AI before greater adoption.
Mahesh Makhija, technology consulting leader, EY India, said, “In industries like financial services, healthcare and retail, AI will reshape basic processes including customer acquisition, operations and service, while IT/ITeS and BPO will undergo more dramatic changes.”
According to Makhija, next-generation industries like biotech, advanced manufacturing and renewables will have the potential to leapfrog to AI-first business models.
To maximise the potential for economic growth, India needs to focus on AI policy agenda, compute infrastructure, AI research, addressing challenges in responsible governance, intellectual property rights, and data protection, Makhija added.