New Delhi

Artificial Intelligence (AI) is likely to have a significant long-term impact on employment opportunities for India’s skilled workforce and could alter the country’s IT services-driven growth model, according to EY’s latest Economy Watch report.

In its May 2026 edition, the report noted that the rapid advancement of AI technologies is expected to transform labour markets worldwide, particularly affecting sectors that have traditionally employed large numbers of skilled professionals.

EY observed that India’s highly successful IT services industry, which has generated millions of jobs and emerged as a major contributor to export earnings over the past two decades, may face structural changes as businesses increasingly adopt AI-powered tools and automation solutions.

The report stated that AI’s continued evolution could influence employment prospects for skilled workers who have historically benefited from the strong demand for information technology and business process management services.

With companies across the globe embracing generative AI and automation to enhance efficiency and reduce operational costs, concerns are growing over the future of several white-collar roles. According to the report, the challenge for India will be ensuring that workers can adapt to rapidly changing skill requirements in an increasingly technology-driven environment.

EY cautioned that technological disruption could affect economic growth in both the short and long term if workforce reskilling and adaptation do not keep pace with innovation.

At the same time, the consultancy maintained a positive outlook on India’s broader economic prospects. Referring to projections by the Organisation for Economic Co-operation and Development, the report said India is expected to remain among the fastest-growing major economies and could emerge as the world’s largest economy in purchasing power parity (PPP) terms by 2063 under favourable conditions.

However, EY stressed that sustaining this growth trajectory would require policymakers to address emerging challenges, including geopolitical uncertainties, energy security concerns and the transformative impact of technologies such as AI.

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The report underscored the need for India to recalibrate its long-term development strategy to effectively respond to both immediate and future challenges that could influence the country’s economic growth path.