In India’s IT sector, generative AI is reorganizing work, increasing productivity, and shifting demand toward hybrid skill sets rather than displacing many jobs, according to a report released on Saturday.

While mid- and senior hiring remained steady, the Indian Council for Research on International Economic Relations (ICRIER) and OpenAI report found modest moderation in entry-level hiring.

It also noted that productivity gains from AI outnumber declines across affected business divisions by a ratio of 3.5 to 1. Employers observe stability at mid and senior levels and a slight moderation in hiring, mostly at the entry level.

This slowdown is consistent with wider post-pandemic trends in the IT sector and cannot be solely ascribed to the deployment of AI, according to researchers, the paper stated.

It also noted that, on average, divisions reporting increased output with stable or smaller team numbers are 3.5 times more numerous than those reporting productivity declines.

According to the report, which was based on a survey of 650 IT companies in ten cities, there is a growing need for candidates who have both domain experience and AI or data skills. Sixty-three percent of the firms surveyed said that they are in more need of such hybrid profiles.

More over half of the companies polled said they are already promoting AI adoption through training or awareness campaigns, and another 38% say they intend to do so.

AI is facilitating more effective scaling without corresponding job losses, as seen by the almost one-third of business divisions reporting both more output and cheaper expenses.

Indian authorities should be reassured by the findings without becoming complacent. Although India’s IT industry seems to be handling the adoption of AI rather successfully, many businesses are still ill-prepared for the future, according to Shekhar Aiyar, Director & Chief Executive, ICRIER.

According to the report, only 4% of businesses trained more than half of their employees in AI within the previous year. Finding experienced trainers is a major obstacle, as are high expenses and unpredictable returns, organizational preparedness, and ethical and legal issues.