Goldman Sachs Forecasts Gen-AI Will Boost India Labour Productivity

Goldman Sachs projects that the adoption of Generative Artificial Intelligence will increase India's annual labour productivity growth by approximately 0.4 percentage points over the next ten years. The financial services brokerage estimates that these gains could range between 0.1 and 0.8 percentage points, depending on how effectively the technology handles complex tasks.

The report indicates that Gen-AI will primarily augment the workforce rather than replace it. Approximately 42-48% of non-agricultural employment is expected to be complemented by the technology, while only 8-12% of roles face a risk of substitution. Knowledge-intensive sectors, such as financial services, healthcare, and education, are positioned to see the most significant improvements.

Realizing these productivity boosts depends on substantial investments in digital infrastructure. The firm highlights the need for increased computing capacity, data centers, and reliable supplies of electricity and water to support the technology's expansion.