Generative Artificial Intelligence (Gen-AI) has the potential to substitute 8-12 per cent of India's non-agricultural employment while complementing 42-48 per cent of the workforce by enhancing productivity rather than replacing workers, according to a report by global investment bank Goldman Sachs.
The report indicates that although AI-powered technologies are expected to automate a portion of work across multiple industries, their overall impact on India's labour market is likely to involve a significant reallocation of jobs instead of widespread unemployment. Occupations that rely heavily on physical labour are expected to remain largely insulated from the effects of automation.
According to Goldman Sachs, 8-12 per cent of non-agricultural employment faces the risk of substitution, while 42-48 per cent is likely to benefit from AI-assisted productivity gains, with the remaining share expected to remain largely unaffected by the technology.
The report estimates that approximately 9-17 per cent of non-agricultural work tasks in India are exposed to Gen-AI-driven automation, depending on the level of task complexity the technology is ultimately able to handle.
It noted that if Gen-AI advances to perform tasks with difficulty levels of three to four—such as monitoring organisational compliance with regulations, examining financial records, and analysing trends and relationships in data—the share of work tasks susceptible to automation could rise to 13-15 per cent.
Goldman Sachs found that exposure to Gen-AI is highest within the services sector, particularly in industries such as education, media, financial services, and professional services, where a significant portion of work involves information processing, analysis, and content generation. In contrast, sectors that depend primarily on manual or physical work, including construction, have relatively low exposure, with only around 8 per cent of tasks considered vulnerable to AI automation.
The report stressed that the eventual impact on employment would depend on the proportion of tasks within each occupation that can realistically be automated.
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"We estimate that around 9-17 per cent of India's non-agricultural tasks are exposed to Gen-AI-driven automation, but the labour-market impact will depend on how much of each occupation's task content can be automated. Where exposure is limited, Gen-AI is more likely to complement workers by reducing time spent on routine tasks and freeing capacity for higher-value work. Where exposure is higher, substitution risks rise. Meanwhile, occupations dominated by physical tasks are likely to remain unaffected," the report said.
To illustrate the varying impact across occupations, Goldman Sachs cited the financial services industry. In this sector, Gen-AI can complement analysts by automating routine financial modelling and data processing, allowing professionals to focus on more strategic and analytical work. However, repetitive back-office functions, including basic compliance checks and administrative processes, may face a higher risk of automation.
According to the report, the financial services sector accounts for roughly 6 per cent of India's total employment, excluding agriculture. Among occupational groups, clerical support roles face the highest substitution risk, accounting for around 3 per cent of non-agricultural employment. This is followed by professionals (around 3 per cent), services and sales workers (around 2 per cent), and technicians (around 1 per cent), all of whom perform tasks that are relatively easier to automate using generative AI technologies.
At the same time, Goldman Sachs expects employment opportunities to expand in occupations requiring greater physical involvement and hands-on skills. The report projects potential employment gains in physical occupations (around 4 per cent), craft and trade-related workers (around 3 per cent), and plant and machine operators (around 2 per cent), reflecting the lower susceptibility of these jobs to AI-driven automation.
Summing up its findings, Goldman Sachs said the long-term impact of generative AI is likely to reshape the labour market by redistributing work across occupations rather than causing broad-based job losses.
"Overall, Gen-AI is more likely to reallocate labour across occupations over the Gen-AI adoption period," the report concluded, highlighting that artificial intelligence is expected to transform the nature of work by automating routine tasks while creating opportunities for workers to focus on higher-value and more specialised activities.
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