Also Read: India is the AI world\u2019s most valuable unpaid intern<\/a><\/p>\n
His remarks come at a time when India\u2019s IT sector \u2014 long seen as the engine of its services-led growth \u2014 is beginning to feel the early tremors of AI adoption. As companies deploy automation tools, some firms have already started trimming their workforce. Yet Rajan pointed out that the same technology could expand demand in new areas, provided companies and workers move quickly to adapt.<\/p>\n
He stressed that reskilling will be critical. India\u2019s software firms and their employees will need to retool \u201creally fast,\u201d but \u201cthis is not something they cannot overcome.\u201d<\/p>\n
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The concern is not unfounded. India\u2019s position as a global hub for back-office operations \u2014 from call centres to IT outsourcing \u2014 makes it particularly exposed to AI-led automation. Routine coding tasks and customer support roles, which employ millions, are especially vulnerable. A recent note by Citrini Research flagged potential pressure on revenues for Indian IT firms, triggering a market selloff earlier in the week.
Rajan, however, pushed back against alarmist interpretations. \u201cLet\u2019s not get overly wound up in science fiction and think that is the outcome,\u201d he said, referring to the report. \u201cThe fastest users of technology are the people creating the technology. Sometimes there is a sense that this is going really, really fast. What they don\u2019t see is adoption outside the frontier is much longer.\u201dIn his view, the pace of real-world adoption remains uneven. Many global firms are still far from deploying AI at scale, leaving room for Indian companies to reposition themselves. At the same time, multinational corporations continue to expand their global capability centres in India, increasingly shifting higher-value engineering and digital work to the country.<\/p>\n