AI to reshape India’s workforce? 197 million workers face automation risk; 46 million may benefit: Study

Nearly 197 million Indian workers are employed in occupations with a high share of routine tasks that could be automated, while about 46 million work in jobs where artificial intelligence (AI) could enhance productivity, according to a new study based on India’s labour market data.

The findings highlight the uneven impact AI could have on India’s workforce, with the technology potentially improving productivity in some occupations while increasing the risk of worker displacement in others.

The study estimates that 11.4% of India’s workforce faces the risk of job substitution due to AI, while 7.6% could see productivity gains from the technology.

Kerala, Haryana, Maharashtra and Tamil Nadu have the highest shares of workers in occupations where AI is more likely to complement human labour and improve productivity, the study found.

Kerala leads, with 14.4% of its state workforce employed in such roles, followed by Haryana at 11.5%, Maharashtra at 11.1% and Tamil Nadu at 10.7%.

These occupations include healthcare professionals, teachers, scientists, engineers and managers, whose work involves expertise, judgement and responsibility that AI can assist rather than necessarily replace.

In contrast, Uttar Pradesh, Bihar, Jharkhand and Madhya Pradesh face a dual challenge: lower exposure to AI-related productivity gains and fewer workers employed in occupations where the technology could complement human skills.

The paper, titled AI, Automation and India’s Workforce: Who Gains, Who’s Exposed, and How Policy Can Shape the Future, was released on Sunday by Chief Economic Adviser to the Government of India V Anantha Nageswaran.

It was authored by Vidya Mahambare, chairperson of the Centre for Finance and Economics Research at the Great Lakes Institute of Management, Chennai; Vivek Jadhav, assistant professor of economics at the Institute of Management Technology, Ghaziabad; and Vishnu Venugopalan, an Indian Administrative Service officer serving as Additional Secretary to the Tamil Nadu Chief Minister.

The analysis by the Centre for Finance and Economics Research at the Great Lakes Institute of Management draws on data from the Periodic Labour Force Survey (PLFS), offering an assessment of AI exposure grounded in India’s own labour market rather than relying solely on international estimates.

The report recommends targeted reskilling initiatives, stronger AI literacy and wider access to training that combines technical expertise with communication, critical judgement and problem-solving skills.

It also calls for expanding employment opportunities in sectors such as healthcare, education, elderly care and skilled trades, where India faces labour shortages and human interaction remains essential.

For states with lower AI exposure and fewer jobs in which the technology can complement human skills, the priority is to create pathways into higher-productivity employment. The report stresses that workforce preparation must begin before the effects of AI become evident in employment data, rather than waiting for job losses to materialise.

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