A Nomura report shows AI is a net positive for jobs in India, with 83,100 hires vs. 31,921 layoffs. However, it's creating a two-tiered market, reducing demand for entry-level workers while favoring experienced professionals.
India Leads in AI Job Creation and Layoffs
In its Asia Economic Monthly report, Nomura said India was experiencing the largest absolute impact from AI among the Asian economies covered by its analysis, both in terms of documented layoffs and hiring. The report said India's large population and its position as a global back-office hub have made the country a key market for assessing AI's impact on employment.
"We find that India is experiencing the largest absolute impact from AI across both documented layoffs/hiring freezes and AI hiring," Nomura said, adding that "so far, the net impact is also positive for India."
Nomura's data showed that India accounted for 83,100 of the roughly 1.31 lakh AI-related jobs created across the Asian economies in its database. In comparison, it identified 31,921 AI-related layoffs and attrition in India, the highest among the countries surveyed.
AI Creates a Two-Tiered Labour Market
While overall hiring has exceeded job losses, the gains have not been evenly distributed across workers. Nomura noted AI was creating a two-tiered labour market, with companies showing weaker demand for entry-level employees while demand for experienced and senior workers remained relatively stronger.
Citing an ICRIER survey of 651 firms in India's IT sector, the report said 55 per cent of companies reported a decline in entry-level hiring, compared with 25 per cent reporting a decline in mid-level hiring and 14 per cent in senior-level recruitment. The shift comes as companies increasingly automate routine work typically handled by junior employees.
Displaced Roles and Slower Recruitment
Nomura identified banking back-office operations, customer service and junior technical roles such as quality assurance testing and coding among the jobs being displaced by AI. The impact is also showing up through slower recruitment rather than outright layoffs. Nomura cited staffing firm Xpheno's estimate that net hiring by Indian IT companies fell to 140,000 in FY26 from 600,000 in FY22 as companies reduced campus recruitment instead of terminating existing employees.
New Job Creation Concentrated in Tech
At the same time, most new AI-related jobs remain concentrated in technology. Nomura said more than 90 per cent of AI-related job creation in its Asian sample came from the technology sector, while hiring in India was mainly for AI data annotation and linguistics work.
Nomura said the early evidence runs counter to fears that AI adoption would result primarily in large-scale job destruction, but cautioned that the technology was still at an early stage and its full labour-market impact could take years to emerge. "We are positively surprised by our aggregate result showing that AI has been a net positive for jobs," the report said, while noting that there were "many disruptions beneath the surface." (ANI)
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