AI Not Immediate Threat to India’s IT Sector, But Entry-Level Jobs at Risk

Despite global anxieties about artificial intelligence displacing white-collar jobs, a comprehensive new analysis by India’s Council for Research on International Economic Relations (CRIER) suggests that the nation’s $200 billion IT services sector is not facing an immediate existential threat from AI. Instead, the report indicates a structural shift: while mid- and senior-level roles are being augmented by automation tools, entry-level positions—particularly in data entry, basic coding, and customer support—are experiencing the most significant contraction.

The CRIER study, based on employment data from 47 major Indian IT firms and interviews with HR heads across Bangalore, Hyderabad, and Pune, found that AI adoption has accelerated since 2022, primarily in process automation, code generation, and ticket resolution systems. Yet, these technologies have not led to mass layoffs. Instead, firms are retraining staff and reallocating human capital toward higher-value tasks such as AI oversight, client consulting, and complex system integration.

"The AIpocalypse narrative is overblown in the Indian context," said Dr. Meera Nair, lead researcher at CRIER. "What we’re seeing isn’t job destruction, but job evolution. Companies are hiring fewer fresh graduates for routine tasks, but they’re creating new roles that demand hybrid skills—technical literacy combined with domain expertise in finance, healthcare, or logistics."

The report notes a 32% year-over-year decline in entry-level hiring at top-tier IT services firms such as TCS, Infosys, and Wipro, compared to a 7% increase in mid-senior roles requiring AI collaboration skills. Meanwhile, contract-based and freelance engagements have surged by 41%, reflecting a shift toward project-oriented talent models.

Interestingly, the study also found that Indian firms are more cautious than their Western counterparts in deploying AI for customer-facing roles. While U.S. and European firms have widely adopted AI chatbots for tier-1 support, Indian companies continue to rely on human agents for complex, culturally nuanced interactions—preserving thousands of jobs in customer service hubs.

However, the report warns of growing inequality within the sector. Workers with access to upskilling programs are thriving, while those without—particularly from rural backgrounds or non-premier institutions—are being left behind. "This isn’t a technology problem," Dr. Nair added. "It’s an education and equity problem."

Government and industry leaders are responding. The National Skill Development Corporation has launched a ₹500-crore initiative to train 500,000 youth in AI-augmented workflows by 2026. Meanwhile, industry consortia like NASSCOM are partnering with edtech platforms to certify workers in prompt engineering, AI auditing, and ethical compliance.

While sources such as the Indian Motorcycle Forum threads on unrelated topics (e.g., 2026 model announcements and Gilroy-era Harley ownership) contain no relevant data on AI or employment trends, they illustrate the prevalence of digital forum noise—underscoring the need for rigorous, evidence-based journalism in an age of misinformation.

The CRIER findings offer a nuanced counter-narrative to headlines proclaiming AI as an inevitable job killer. In India, the future of work is not about replacement, but redefinition. The challenge lies not in resisting AI, but in ensuring that the benefits of automation are equitably distributed—and that the next generation of workers is prepared not just to use AI, but to lead it.