AI may reshape Indian jobs, but physical work could offer some protection, Goldman Sachs says

Artificial intelligence is changing how companies approach routine and knowledge-based work, raising questions about what the shift could mean for India's large workforce. In an interview with Bloomberg on August 14, Goldman Sachs Group's chief India economist Santanu Sengupta said India's labour force is unlikely to face widespread AI-driven job losses, although some services-sector roles could be affected.

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Why India's workforce may be less exposed

A significant share of India's workers are employed in roles involving physical or mechanical tasks. Construction and retail trade together account for about 40% of the country's workforce, and these jobs are currently less affected by AI, Sengupta said.

The nature of India's employment landscape could therefore make the country less exposed to AI-related job displacement than several other economies. For you, this means the impact of AI could vary considerably depending on the kind of work you do.

Services face greater AI disruption

The picture is different in the services sector, where AI is increasingly being used to automate or assist certain tasks. Sengupta said areas including finance, healthcare, education and business services could benefit from AI adoption.

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However, there are also substitution risks in postal and telecommunications services and IT services, particularly in call-centre roles. If you work in a service-based job, AI could therefore change your responsibilities depending on whether companies use the technology to support employees or automate specific tasks.

Gradual AI adoption could limit job losses

Goldman Sachs estimates that correctly sequencing AI adoption could add 0.4 percentage points to India's overall productivity over a 10-year period.

Sengupta said that if AI is introduced gradually, the productivity gains could outweigh potential job losses over a five-year period. This could give businesses and workers more time to adapt as the technology becomes part of everyday operations.

For India's workforce, the eventual impact will depend on how quickly companies adopt AI, which tasks they automate and how different sectors respond to the technology.