GenAI may replace up to 12% of India's non-farm jobs, says Goldman Sachs

Synopsis

Generative AI could substitute twelve percent of Indian non-agricultural jobs. Forty-eight percent of jobs will likely be complemented by this technology. Healthcare and education sectors are expected to benefit most from AI augmentation. India's GenAI adoption depends on infrastructure and compute affordability. Widespread adoption could boost annual labor productivity growth significantly.

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Generative Artificial Intelligence (GenAI) could substitute 8-12% of non-agricultural jobs in India, while 42-48% are likely to be complemented, according to a Goldman Sachs report released Wednesday. The report suggests that GenAI’s primary impact will be the reallocation of labour across occupations as adoption increases.

At the sector level, healthcare, education, and media and entertainment are expected to benefit the most from AI-driven augmentation. In contrast, postal and telecom services, along with parts of the financial services sector, face higher substitution risks due to the large share of customer support and documentation tasks that can be automated.

Overall, Gen-AI could perform 9-17% of the tasks currently carried out by India’s non-agricultural workforce. In occupations with lower AI exposure, the technology is expected to complement workers by automating routine activities, allowing them to focus on higher-value tasks. However, roles with greater exposure face an increased risk of job substitution, while occupations centered on physical work are likely to remain largely unaffected.

The report estimates that widespread Gen-AI adoption could boost annual labour productivity growth by around 0.4 percentage points over a 10-year period. Depending on the complexity of tasks AI can perform, the productivity gain could range from 0.1pp to 0.8pp.

“While routine IT-enabled business-process services functions face substitution risk, aggregate tech sector employment (around 2% of non-agricultural employment), services exports, and GCC expansion remain resilient, as of now,” said Goldman Sachs.

The report also noted that India’s Gen-AI adoption will depend not only on software capability, but also on compute affordability, data-centre buildout, reliable power, water availability, and broader digital infrastructure.

“With India’s current data-centre capacity of only around 1GW (1% of global data centre capacity), scaling AI adoption will require substantial investment in both physical and digital infrastructure,” it said.