The fast-moving AI and automation wave is likely to redefine global employment, potentially reducing demand for certain white-collar roles in India's IT services and BPM sectors that have driven job creation and export revenue.

Technological disruption poses risks to both short- and long-term growth if reskilling lags behind rapid innovation.

EY’s Economy Watch May 2026 warns that AI will have a lasting impact on India’s skilled workforce and its IT-services-led growth, with employment risks if workers fail to adapt to new skill demands.

To sustain growth, policymakers must address emerging challenges—geopolitical disruptions, energy security, and AI-driven tech shifts—and realign growth and development plans accordingly.