India's IT Sector Thrives in GenAI Era: Productivity Up, Jobs Stable

The report from Indian Council for Research on International Economic Relations (ICRIER) and OpenAI found modest moderation in entry‑level hiring while mid and senior hiring remained stable and noted productivity gains from AI outnumber declines by a ratio of 3.5 to 1 across affected business divisions.

"Firms report a modest moderation in hiring, primarily concentrated at the entry level, alongside stability at mid and senior levels. Researchers note that this moderation aligns with broader post-pandemic trends in the IT industry and cannot be attributed to AI adoption alone," the report said.

On an average, divisions reporting higher output with stable or reduced team sizes outnumber those experiencing productivity declines by a ratio of 3.5 to 1, it added.

Based on a survey of 650 IT firms across 10 cities, the report showed rising demand for candidates who combine domain expertise with AI or data skills, with 63 per cent of firms reporting increased need for such hybrid profiles.

Over half of surveyed firms report that they are already supporting AI adoption through awareness or training initiatives, with an additional 38 per cent planning to do so.

Nearly one‑third of business divisions reported both increased output and lower costs, indicating AI is enabling more efficient scaling without proportional job cuts.

"The results should reassure Indian policymakers without inducing complacency. While India's IT sector appears to be managing AI adoption relatively well, many firms remain insufficiently prepared for what lies ahead," said Shekhar Aiyar, Director & Chief Executive, ICRIER.

The report maintained that only 4 per cent of companies AI-trained more than half of their workforce in the past year. Key challenges cited include difficulty finding qualified trainers, high costs and uncertain returns, ethical and legal concerns, and organisational readiness.

- IANS