Generative AI is reshaping India's information technology industry, but has not led to large-scale job losses as previously feared. Instead, AI is boosting productivity, changing skill needs and creating a shift in the recruitment structure.
This conclusion was made in a report by the Indian Council for International Economic Relations Research (ICRIER) with the support of OpenAI.
The study surveyed more than 650 information technology (IT) companies in 10 cities in India from November 2025 to January 2026, providing one of the most detailed business-level assessments of the impact of AI on jobs and productivity.
According to reports, the recruitment rate has slowed down, especially among new graduates, but overall employment in the IT industry is still growing.
Recruitment demand at the intermediate level increased sharply, while senior positions remained stable. Notably, jobs that are often considered vulnerable to AI replacement such as software programmers, analysts, or database managers are among the groups with the fastest growth demand.
Researchers believe that this reflects the role of AI as a tool to increase productivity rather than directly replacing skilled labor.
In nearly 1,900 surveyed business units, the number of units recorded outstanding productivity increases compared to the number of units reduced, with a rate about 3.5 times higher.
About one-third said they achieved higher output at lower costs, showing that AI helps businesses expand efficiency without personnel cuts.
The report also pointed out a clear change in recruitment priorities. About 63% of businesses said that demand is increasing for workers with combined skills when they both have professional expertise and understand AI or data.
Skills such as prompting, data analysis and machine learning are currently among the most sought-after.
However, major challenges still exist. Although more than half of businesses have implemented training programs or raised awareness about AI, only about 4% said they have trained more than half of the workforce in AI-related skills. High costs, lack of qualified lecturers, and organizational readiness are considered major barriers.
According to experts, the increasing global demand for AI-based services may continue to create more jobs for India's IT industry in the long term.
Instead of a job crisis, this industry is witnessing a transformation, in which workers learn new skills and shift to more suitable roles as the digital economy expands.
