Artificial Intelligence (AI) is poised to drastically reshape the Indian workforce, with an estimated 38 million jobs expected to be transformed by 2030. A recent report from EY India predicts that AI will bring a productivity boost of 2.61 percent to the economy, primarily driven by gains in the organized sector, and an additional 2.82 percent potential from the unorganized sector’s adoption of generative AI (GenAI).
GenAI to Transform Workforce and Economy
The report, titled How much productivity can GenAI unlock in India? The AIdea of India: 2025, outlines how GenAI will revolutionize India’s economic and job landscape by the end of this decade.
According to the findings, a significant 24 percent of tasks across industries could be fully automated by AI, while an additional 42 percent can be enhanced through AI. This shift would result in knowledge workers freeing up between 8-10 hours of work per week.
“GenAI is transforming India’s economic landscape by unlocking unprecedented opportunities across sectors,” said Rajiv Memani, Chairman and CEO of EY India. “This revolution will fundamentally reshape jobs, driving productivity and innovation. Building talent pipelines and prioritizing upskilling must be at the forefront of every organization.”
Sector-Specific Productivity Gains
The EY analysis delves into industry-specific productivity gains, revealing that the services sector is likely to experience the largest benefits due to its higher labor contribution. Call center management, for instance, is expected to see an 80 percent productivity boost, while software development could grow by 61 percent. Content development and distribution (45 percent), customer services (44 percent), and sales and marketing (41 percent) are also set for significant improvements.
In contrast, industries like IT/ITeS, healthcare, and banking/insurance will see more modest increases in productivity. IT/ITeS is projected to grow by 19 percent, healthcare by 13 percent, and banking and insurance by 8-9 percent. Manufacturing, auto, and pharma industries, which contribute less labor to gross output, are expected to experience only a slight 2 percent increase.
Talent Shortage a Major Barrier to AI Adoption
Despite the potential for growth, the survey points out that talent shortages remain a significant obstacle to AI adoption. Only 3 percent of Indian enterprises have the necessary in-house talent to fully leverage AI, while 97 percent of executives identified the lack of skilled workers as a primary challenge.
“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,” said Mahesh Makhija, Technology Consulting Leader at EY India. “To maximize the potential for economic growth, India needs to focus on AI policy agenda, compute infrastructure, AI research, and addressing challenges in responsible governance.”
Early Stages of AI Adoption
While the promise of AI is vast, the report reveals that Indian enterprises are still in the early stages of adoption. Only 15 percent of surveyed companies have implemented GenAI in production, while 34 percent have completed proof-of-concept (POC) projects. Another 11 percent are working on productionalizing successful POCs. A large portion of businesses (36 percent) has not yet begun experimenting with GenAI, highlighting the early phase of AI adoption in India.
Data Readiness and ROI Concerns
Another challenge identified is the lack of data readiness. Only 3 percent of surveyed enterprises report being fully prepared for AI deployments, while 23 percent are not in a position to take on AI projects due to inadequate data infrastructure.
Furthermore, the ability to measure the Return on Investment (ROI) remains a key hurdle for Indian companies. Only 8 percent of enterprises with GenAI in production are able to fully measure AI-related costs and allocate resources effectively. With AI costs expected to fall, businesses will need to develop systematic methods to assess the costs and impacts of AI investments to see greater adoption and maximize productivity.
AI’s potential to reshape India’s workforce and economy is undeniable, with a focus on enhancing productivity across sectors. However, challenges such as talent shortages, data readiness, and measuring ROI need to be addressed to unlock the full potential of generative AI.
