AI may not take away many jobs in countries like India: World Bank report

The report also found that the share of jobs expected to benefit from meaningful, AI-driven productivity gains is ​16.2 per cent in developing ⁠economies and 18.7 per cent in high-income countries.

The World Bank report has been billed as one of the first comprehensive assessments on the potential impact of AI on the lives of roughly 6.8 billion people who live in developing countries. It comes at a time when the AI race between the US and China is heating up, which could leave developing countries like India at risk of becoming overly reliant on either of the two economic giants.

“AI has thrown developing economies a lifeline, and they ⁠should seize it,” Indermit Gill, the World Bank’s chief economist, said in a statement accompanying the ​report. Gill also warned that the cost of missing out on AI progress could be severe for any country. “Today’s developing economies missed the first Industrial Revolution and spent the next two centuries paying ​the price. They cannot afford to miss this one,” he said.

These findings echo previous remarks by Indian government officials on AI and jobs. At an event last year, S.Krishnan, Secretary, Ministry of Electronics and Information Technology (MeitY), suggested that the impact of AI on jobs might be limited in India as it has a smaller share of white collar jobs compared to other countries.

“Many countries of the world have a lot more people who are engaged in office-oriented work than we have in India. Many of those are going to be replaced. White collar jobs in India are still a limited proportion of the total number of jobs that we have. The headroom for advancing productivity, whether it is in intellectual work or any work in any kind of enterprise, is also substantially high in India,” he said.

But the World Bank’s assessment also comes with an important caveat. The report stated that developing countries which rely on the outsourcing of business processes, such as call centers and back-office services, face the threat of big job losses as AI adoption increases.

“AI could close off a promising route to middle-class employment in many developing economies, threatening call-center work and entry-level jobs in software, finance, and business services,” Gill said.

In April 2026, US-based enterprise software giant Oracle announced that it has cut roughly 11,000-12,000 jobs in India — almost half of its workforce in the country — as part of a larger global restructuring exercise, even as it poured billions of dollars into AI and cloud computing investments.

In a post on X, Zoho founder Sridhar Vembu recently said that India’s information technology (IT) sector has slowed hiring as companies divert spending towards artificial intelligence (AI) infrastructure and data centres.

“The money that would have gone to new employees is now going to AI and data center costs, the latter due to the steep rise in server and memory prices,” Vembu said, adding that while Zoho is working to keep such costs under control, many of the underlying factors remain beyond the company’s control.

Push for sector-specific AI

Tech giants such as Google, Microsoft, Meta, and Amazon are spending billions to build energy-hungry data centres that can power AI models. This has set off an AI arms race amongst governments who are scrambling to ​ensure their nations reap the benefits of AI.

However, according to the World Bank report, emerging economies should not spend vast resources on bespoke large language models (LLMs) and their underlying AI infrastructure.

Instead, such countries should focus on developing small language models (SLMs) that cater to specific sectors such as agriculture, education, and healthcare. “By adapting small, low-cost AI tools to local conditions, they can ​bring better medical care, education, judicial services and agricultural extension within reach of millions,” Gill said.

The report acknowledged that this means developing countries could become dependent on technology they do not control. In order to avoid excessive dependence on the US or China without having to spend the large sums required to replicate the AI stack, the World Bank recommended buying “models, cloud services, and other AI tools from many countries—and make sure they can work together and be swapped out without requiring the entire system to be rebuilt.”