India stands at a pivotal juncture in 2025, with over 371 million youth aged 15–29—nearly 27% of its 1.46 billion population—entering a workforce shaped by rapid technological advancements, particularly in AI and automation. Every year, more than 10 million graduates and diploma holders, including 1.5 million engineers, graduate from India's higher education system. This demographic dividend presents immense opportunity, but also a pressing challenge: how to create enough jobs for this vast talent pool, especially as automation threatens traditional employment models.
The Dual-Edged Sword: AI and Automation
AI and automation have the potential to reshape India's labour market in profound ways:
Potential for Job Displacement: Routine and repetitive tasks in sectors such as manufacturing, certain IT services, and even basic roles in hospitality are vulnerable to automation. Concerns persist that, unless managed carefully, India could face significant job losses—an acute risk, considering the millions of people entering the workforce each year.
Job Creation Opportunities: Conversely, AI is also expected to create millions of new roles, particularly in technology, data analysis, AI engineering, machine learning, cyber-security, and related fields. The World Economic Forum (WEF) anticipates AI will generate 12 million more jobs than it displaces by 2025. Estimates suggest that approximately 1 million new AI-related jobs in IT alone will be available by 2025, and nearly 20 million across IT, manufacturing, agriculture, and logistics through digital reskilling and redeployment.
Striking the Right Balance
Given India's unique position—huge youth population, rising formal job creation (over 14.5 million net additions expected in FY 2024–25), and a thriving manufacturing and service sector—the way forward involves a multi-pronged strategy:
Focus on High-Employment Sectors
Manufacturing Drive: India's government is strengthening its manufacturing base through initiatives such as the National Manufacturing Mission and the newly launched Employment Linked Incentive (ELI) Scheme, which aims to create 35 million jobs over two years from August 2025, with a particular focus on the manufacturing sector.
Travel & Hospitality: Sectors such as travel and hospitality, which are expected to contribute roughly 5 million new jobs over 5–7 years, are less susceptible to automation. Here, India's strength in personalised, high-touch services offers a competitive edge that creates sustainable employment.
Policy Incentives Linking Investment to Employment
The government now links incentives for investors—particularly in manufacturing—to the number of jobs created, ensuring that technology adoption does not come at the expense of employment. The ELI scheme, for instance, incentivises both employers (up to ₹3,000/month per new employee) and employees, focusing on direct and indirect job creation.
Reskilling and Industry-Academia Partnerships
With only 10–20% of India's technical and general graduates described as "readily employable," a concerted focus on skilling—especially in emerging domains like AI, robotics, and precision engineering—is critical. Up-skilling existing workers for new digital-era jobs ensure a smooth transition and reduce frictional unemployment.
Intelligent Application of Automation
AI and robotics should be deployed to take over tasks that are hazardous, extremely repetitive, or require superhuman accuracy. At the same time, jobs that demand empathy, creativity, and personalised service—hallmarks of Indian sectors like hospitality—remain people-centric. This division enables India to maintain its service excellence while advancing up the value chain, where automation is necessary.
AI for Job Creation
AI itself can be leveraged to stimulate employment by:
- Powering new industries and startups across domains from agritech to edtech and logistics.
- Optimising supply chains to create indirect jobs in MSMEs and rural regions.
- Assisting policymakers to map employment trends and design dynamic skilling programs targeted at future job requirements.
The Power of Human Creativity: The Indian Advantage
One of the most significant domains where AI and automation cannot replace human creativity is the arts. India's vibrant creative industries—spanning advertising, filmmaking, music, and digital content—underscore how essential the human touch is:
Advertising: Agencies in India continue to produce memorable campaigns rooted in cultural nuance, humour, and emotion (such as Fevicol's iconic ads and Amul's witty billboards). These campaigns resonate because creative teams craft these campaigns, who intimately understand their audience.
Film & Media: India produces more films than any other country, and each successful movie is a product of complex human collaboration—encompassing directors, writers, performers, composers, designers, and technicians. Blockbusters like "Gully Boy" or "RRR" connect because of their authentic stories and emotional impact, not just production value.
Audio-visual and Digital Platforms: Content creation for OTT platforms (such as Netflix, YouTube, and Amazon Prime) is booming, creating jobs in writing, performing, designing, and editing. While AI can assist with editing or translations, it still cannot genuinely replicate the originality and empathy behind compelling content.
Creative Jobs Growth: The expanding landscape of Indian content creators—stand-up comedians, influencers, animators, and storytellers—demonstrates that jobs centred on creativity, originality, and emotional intelligence will remain resilient and even flourish in the AI era.
The way forward
India's challenge is not to resist the incoming AI and automation wave, but to strategically harness it—balancing adoption of cutting-edge technologies with strong job creation, primarily through fostering manufacturing and creative industries, focusing on skill development, and leveraging sectors where human touch is irreplaceable. Proactive government policy, industry skilling efforts, and intelligent deployment of AI can ensure India emerges as both a technology leader and a job creator, turning its demographic dividend into lasting prosperity.
Disclaimer: Opinions expressed are the author’s own and do not reflect the views of this publication. The publication is not liable for the accuracy or completeness of the content.
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