AI will cause white-collar job displacements in India, create new, high-value jo
Global body also predicts weak exports to slow down Indian economy to 6.3 percent in FY27
By Samreen Wani
Last Updated: Oct 07, 2025, 11:36 IST2 min
Advertisement
The Indian economy is likely to grow by 6.3 percent in FY27 compared to 6.5 percent in FY26, driven by weaker export prospects, according to a recent report released by the World Bank. Besides India, the World Bank’s South Asia Update released on October 7 forecasts a downward revision in economic growth for Maldives and Nepal in 2026 due to “growing foreign exchange pressures, and social unrest”. Overall, the South Asian region is expected to grow at 5.8 percent in 2026, which is a significant slowdown compared to a robust 6.6 percent growth this year.
The report, which focuses on the implications of artificial intelligence (AI) adoption on the labour market in South Asia, indicates that AI is poised to act as both a significant catalyst for economic growth and a source of immediate disruption, particularly within India’s white-collar services sector. While the wider South Asian region is deemed “moderately exposed” to AI-driven job changes due to its large share of low-skill and agricultural jobs, India, with its reliance on the services economy, faces a highly concentrated impact of “pre-mature de-professionalisation” or the displacement of routine white-collar service sector jobs.
The report notes that the information and communication technology (ICT) market in India contributed 7.5 percent to the country’s GDP and generated 5.4 million jobs in 2023. Indian companies are also uniquely positioned to reap substantial productivity gains from AI, thanks to their existing strengths in the services industries that are highly suited for AI use.
Despite the expected displacement, AI is simultaneously creating new, high-value opportunities. The report highlights that AI-related job postings more than doubled between January 2023 and March 2025, making up 6.5 percent of all white-collar listings. This demand for AI skills is accelerating quickly, outstripping the growth of non-AI jobs by 75 percent.
In India, 5.8 percent of high-skill job postings require AI expertise, a figure that reflects the skewed nature of growth in a few key cities. The southern technology corridor is the primary engine: Bengaluru and Hyderabad are leading the charge among AI jobs, with Pune and Chennai also demonstrating prominent growth.
The report notes that a successful rollout of AI relies on lessons learned from past technological revolutions. Countries must possess the right preconditions, reliable digital infrastructure, a skilled and resilient workforce, and a business-friendly environment to maximise productivity gains and minimise job displacements. The International Monetary Fund’s (IMF) AI Preparedness Index assesses these foundations across four key dimensions of digital infrastructure, human capital, technological innovation and economic integration, and legal frameworks and regulations. Crucially, in South Asia, India is the singular exception; the rest of the region scores below the average for emerging market and developing economies (EMDEs) in all four areas of preparedness.
First Published: Oct 07, 2025, 11:35
Subscribe Now- Home /
- Ai-tracker /
- Ai-will-cause-white-collar-job-displacements-in-india-create-new-high-value-jobs-world-bank
Advertisement
Advertisement
Advertisement