In Jaipur, Rajasthan, a small pottery workshop echoes with the familiar rhythm of traditional craft. Hands still shape, mold, and glaze clay pots just as they have for generations. But in a corner, a young apprentice scrolls through his phone—not for entertainment, but to compare prices on WhatsApp, track orders through local resellers, and watch short videos on new techniques to make designs that appeal to urban buyers. Here, centuries-old artistry meets the digital age, where AI and online tools are quietly reshaping even the smallest corners of India’s informal economy.
Meanwhile, in Bengaluru, the corporate world tells a harsher story. A software tester packs up his desk after learning that an AI tool can perform his tasks faster and cheaper. Three months’ basic pay later, he leaves the office for the last time. These two scenes—one from a dusty workshop, the other from a high-rise office—capture the paradox of AI in India: it is no longer just a white-collar phenomenon. AI is spreading through workshops, shops, farms, transport hubs, and home-based enterprises, forcing a reckoning with whose jobs will change, who will gain, and who will be left behind.
Beyond the Office Walls
Much of the AI and employment conversation in India has focused on IT and BPO sectors, with recent layoffs at companies like TCS and Infosys making headlines. But this perspective overlooks a crucial fact: 90% of India’s workforce is informal.
Street vendors, artisans, domestic helpers, and gig workers are now encountering AI tools in real life. For a small kirana shop, AI-powered inventory apps and digital payments can reduce waste and improve margins—but for older shopkeepers with limited digital literacy, these tools risk making them obsolete as larger platforms dominate sales.
Similarly, clusters like Sambhar’s pottery and Tiruppur’s knitwear are adopting AI for design and quality control. While large units benefit from improved competitiveness and efficiency, small workshops often cannot afford the tools or reskill workers, putting traditional livelihoods at risk. This is not a sudden unemployment crisis, but a slow hollowing out of occupations that have sustained communities for generations.
Manual Work Isn’t Immune
Unskilled and semi-skilled workers have long been considered safe from automation. But AI-powered machinery, predictive maintenance systems, and automated logistics are entering farms, warehouses, and construction sites. Productivity pressures mean fewer workers are needed to accomplish the same tasks.
At the same time, AI enables new forms of survival. Platforms for ride-hailing, deliveries, and home services provide work for migrant labourers—but also introduce algorithmic management, surveillance, unstable pay, and opaque rules. In effect, AI does not always eliminate work; it reorganizes precarity.
Artisans face a dual reality: AI design tools can undercut handmade crafts, yet digital marketplaces open access to global customers. Success now depends on digital literacy, logistics support, and policies that favor scalability over tradition.
Inequality Shapes the AI Moment
India’s encounter with AI differs sharply from developed economies. In Europe and the US, automation threatens clerical, administrative, and legal jobs, cushioned by social safety nets. In India, workers displaced by AI rarely have savings, institutional support, or time to reskill.
Statements that “AI will create more jobs than it destroys” ring hollow. Even if the total number of jobs increases, transition costs fall unevenly, favoring urban, English-speaking, and digitally literate workers. Vulnerable groups—women in informal work, older labourers, and low-income workers—are most at risk of being locked out.
Policy papers often focus on GDP growth and employment projections, but they overlook a crucial truth: AI-driven growth without inclusion deepens inequality. If AI mainly benefits large firms, urban centres, and already skilled workers, it could widen social and regional divides rather than bridge them.
A Path Forward
Despite these challenges, India has an advantage: its workforce is resilient and adaptable, having navigated shocks from demonetisation and the COVID-19 pandemic. But adaptation must be supported, not assumed.
Reskilling programs should go beyond coding bootcamps. Initiatives must include digital literacy for shopkeepers, platform rights for gig workers, affordable AI tools for small manufacturers, and design support for artisans. Public investment in labour-intensive sectors—care work, community services, and cultural production—can absorb displaced workers while creating social value.
Stronger safety nets, such as health coverage, social security, and income support, will allow workers to explore new opportunities without falling into destitution. Without such measures, efficiency gains from AI risk coming at the cost of social stability.
The Choice Ahead
AI is not inherently ruthless—it is a tool shaped by human choices. In India, these choices will determine whether AI concentrates wealth or distributes opportunity. From the software engineer in Bengaluru to the potter in Jaipur, the future of work is being renegotiated.
If policy, industry, and society expand their vision beyond corporate profits, AI could become a lever for shared prosperity. If not, it risks automating inequality—faster, cheaper, and at an unprecedented scale.