AI Adoption Reshapes Jobs In India’s IT Sector: ICRIER Study

 As global debate around artificial intelligence (AI) continues to focus on fears of widespread job losses, new evidence from India’s IT sector offers a more grounded, data-driven view. A new study conducted by the Indian Council for Research on International Economic Relations (ICRIER), and supported by OpenAI, found that generative AI is currently not causing mass job displacement but is reshaping how work is organised, raising productivity and transforming roles. 

Titled ‘AI and Jobs: This Time Is No Different’, the study represents one of the most comprehensive firm-level assessments of gen AI adoption in India to date. Drawing on a survey of 650 IT firms across 10 cities (conducted between November 2025 and January 2026), the research offers a granular view of AI’s real-world impact, analyzing shifts in hiring patterns, occupational demand, productivity outcomes, and workforce skilling. 

Ronnie Chatterji, Chief Economist, OpenAI 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.” 

AI Adoption Is Driving Transformation, Not Disruption 

Firms report a modest moderation in hiring, primarily concentrated at the entry level, alongside stability at mid and senior levels. Researchers note that this moderation aligns with broader post-pandemic trends in the IT industry and cannot be attributed to AI adoption alone. 

Roles commonly perceived as most exposed to AI, such as software developers and database administrators, are also among those experiencing the strongest growth in demand, indicating that gen AI is primarily functioning as a productivity-enhancing complement to technical and analytical work, rather than a substitute. 

Shekhar Aiyar, Director & Chief Executive, ICRIER said: “Everyone has opinions on this matter, but the ICRIER–OpenAI study brings evidence to the table. The authors have complemented survey findings with in-depth interviews with Indian IT industry leaders to better understand the true impact of generative AI. 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.” 

Productivity Gains Are Broad-Based

Across the 1900+ business divisions identified as being most affected by AI, productivity gains significantly outnumber declines. On an average, divisions reporting higher output with stable or reduced team sizes outnumber those experiencing productivity declines by a ratio of 3.5 to 1. Nearly one-third of divisions report both increased output and reduced costs, indicating that AI is enabling firms to scale output more efficiently without corresponding reductions in employment. 

Hiring Is Shifting Toward Hybrid Skills 

AI adoption is reshaping hiring priorities across the sector. The study finds 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. 

Upskilling Is Underway, but Coverage Remains Uneven 

More than half of surveyed firms report that they are already supporting AI adoption through awareness or training initiatives, with an additional 38% planning to do so. However, training coverage remains limited, with only a small share of firms reporting that more than half of their workforce has received AI-related training in the past year. Key challenges cited include difficulty finding qualified trainers, high costs and uncertain returns, ethical and legal concerns, and organisational readiness. 

India’s IT Sector Positioned for Net Job Growth 

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.