AI not replacing jobs but enhancing human roles, says CEA Nageswaran

Chief Economic Adviser V Anantha Nageswaran on Thursday allayed the fear of artificial intelligence taking away job and said rather it enhances the value of working professional. He also urged Industry to develop capabilities to meet AI challenges while reminding that government has done its bit.

Addressing the GCC Business Summit hosted by the Confederation of Indian Industry (CII), he said artificial intelligence does not build, deploy or govern itself. “Someone has to design these systems. Someone has to train them, test them, correct them, and hold them to account. Someone has to decide where they should be used, and where they must not be. Someone has to carry the responsibility when they fail.”

“That work is expanding, not shrinking. And a large and growing share of it is being done in India. AI does not empty these centres. In the centres that are run well, it raises the value of each person who works there,” he said.

Highlighting the role of government-industry collaboration, the CEA said the Union Budget has addressed a long-pending industry demand by simplifying and expanding the transfer pricing safe harbour regime for GCCs. The revised framework provides a uniform margin, significantly higher thresholds and faster, more predictable approvals over a multi-year period, improving tax certainty for such centres, he said.

The government has also launched a national framework to encourage the expansion of GCCs beyond the six major metropolitan cities into tier-II and tier-III locations, he said. “This is not only an economic goal; it is a matter of fairness. The opportunity should not sit in a few metros alone,” Nageswaran said.

At the same time, he underlined that government policy alone cannot secure India’s leadership in the sector. “Government can build the runway, but it cannot fly the plane. The move from cost to capability, from execution to innovation, has to be made by firms and by people,” he said.

Nageswaran highlighted that India currently hosts approximately half of the world’s GCCs, spanning over 2,000 centres that employ more than 2 million professionals. Sector revenues have crossed $60 billion, contributing nearly 2 per cent to the national gross domestic product (GDP). He noted that more than 1,200 of these centres perform advanced work in artificial intelligence and machine learning, establishing India as the second largest enterprise AI talent base globally.

He mentioned that global firms “first came to India for cost. They stayed for capability. That’s an important difference. A cost advantage can be copied by the next low-cost country. A capability advantage is harder to build and harder to lose as well.” He highlighted that global banks run trading platforms in Mumbai and Bengaluru, car makers design embedded systems in Chennai and Pune, and semiconductor firms conduct chip design locally. He cited German firm Merck’s new campus in Bangalore, which holds the company’s largest concentration of digital capability worldwide, making India its fourth largest workforce hub.

He stated that the benefit has flowed both ways. Global firms got world class work done at a fair price and Indian professionals got careers they “could not have imagined one generation earlier. GCC roles today often pay much more than traditional services jobs,” he said.