The Human Side of India’s Robot Economy


This paper explores the changing tides within India’s labour force with the rise of automation, owing to the dawn of advanced technologies such as artificial intelligence and the internet of things. The essay evaluates the impact on the labour force as well as laws and policies put in place to protect the labour issues and regulate the use of robots.


Around the world, companies are incorporating automation and artificial intelligence (AI) to increase the efficiency of technology processes and to improve the productivity of their human workforce. Consequently, people are facing a global threat of job loss. If history is precedent, the concern may wane in the long run, as over 140 years of research[i] shows that technology has created more jobs than it has destroyed. However, in the short term, job cuts are likely to accelerate, especially in the IT sector, where 70 percent of the jobs[ii] will be rendered irrelevant in the next year.


In this push and pull between humans and technology, it is important to recognise the kind of roles that will disappear going forward and identify the ones that will arise. To stop the workforce from becoming obsolete, it is necessary to protect those in replaceable jobs by re-skilling and up-skilling them. To minimise the crisis, governments must work in tandem with companies and labour to further future technologies and provide training respectively.


This paper will detail the robot threat, the missed opportunities in the current system, as well as the opportunities policymakers are yet to seize. Discussion points will include strategies for making human workers more viable and prepared to deploy them alongside bots.

The Robot Threat

India’s labour force faces tough competition from robots. About 20–30 percent of employers in India anticipate a decrease in headcount[iii] due to automation taking over low-skill, monotonous jobs.  At Infosys, for example, some 11,000 workers[iv] have already lost their jobs to automation, and 3,000 Wipro employees faced the same fate[v] after the company deployed Holmes, its AI project. These instances leave no doubt that IT industry jobs will downsize, losing 6.4 lakh jobs by 2021, according to HfS Research estimates.[vi]


And IT is not the only sector in jeopardy. Robotic Process Automation (RPA) has started replacing workers in financial services and helped reduce costs by more than 50 percent,[vii] because of improved accuracy and efficiency of data intensive, repetitive tasks. These virtual systems can work round-the-clock and produce a faster turnaround. Axis Bank, ICICI and HDFC are among those[viii] who have adopted the technology for traditional functions such as passbook updating, cash deposits, verification of know-your-customer details, salary uploads and even loan processing and sales of financial products. The Indian auto sector, too, has adopted automation rapidly. For instance, Maruti Suzuki’s factory in Manesar, Haryana has 7,000 workers and 1,100 robots. In agriculture, drones and robots[ix] will maximise yield and reduce damage to crops. High employment-generating sectors such as manufacturing, textiles and food processing services, too, are under threat.


Technology is now challenging human supremacy in many spheres by executing tasks faster and with smaller error margins. For instance, some AI can identify cancer more accurately than trained pathologists and sniff out fraudulent banking activity in milliseconds. Warehouse robots[x] employed by e-commerce majors save time and work with higher precision.


In addition to an increase in layoffs, mass hiring, too, has slowed down in tech firms as operations shift to smaller teams that can handle more sophisticated needs while robots take over simpler functions.

The Missed Opportunities

Of the million new workers that join the country’s workforce each month, less than 0.01 percent[xi] are able to find jobs. The National Skill Development Corporation (NSDC), sourced from an RTI, revealed that from the 8 lakh candidates trained in the year 2016 through non-scheme skilling programmes in 2016­–17, less than half secured jobs.[xii] In 2015, too, only about 46 percent skilled students found employment.


In its guidelines, the government does note that “placement per se is not compulsory under these schemes.” However, the training service centres provide “placement assistance” in the form of networking opportunities, resumé dissemination and aid in setting up interviews. To incentivise private-partner training centres to better their placement rate, the NSDC offers monetary rewards such as loans, equity or grants,[xiii] in return for more success stories.


As a result of tightening skilling related laws, any centre with consistently subpar placement performance can lose its “star grades” and eventually be dropped from the PMKVY (Pradhan Mantri Kaushal Vikas Yojana). Monitoring of students, too, is being increased. Dipstick surveys of students every few months after graduation will be conducted to assess if they have managed to secure and hold down jobs.


Another deterrent in hiring is that even among those equipped with relevant hard skills, a soft skills deficit is pervasive. Over 36 percent of 42,000 Indian employers surveyed by multinational HR software and consulting services firm ManpowerGroup[xiv] cited a lack of people skills—communication, confidence, analytical thinking—as a reason for being unable to fill vacancies successfully.


The human skills gap, however, is not the only hole that needs plugging. India also has a long way to go in terms of implementing and using new-age technologies from an infrastructure point of view.


A recent survey by the research arm of Swiss investment firm UBS[xv] noted that India, which ranked 13th out of 18 nations, is not only behind the US and the UK when it comes to innovation on a per capita basis, it also “badly” lags other Asian countries. In absolute terms, India’s $50.3 billion R&D budget outstrips those of other nations, but as a proportion of GDP, it is a dismal 0.6 percent. Moreover, while the top talent in the country—mostly from the revered Indian Institute of Technology (IIT) campuses with an acceptance rate of under 1 percent[xvi]—are impressive, they’re a small share of total graduates. Many of the educational institutes in the country are subpar.[xvii] Given this sorry state, technology implementation and education need an overhaul.

The Opportunities

Even though automation will be the kill switch for many traditional roles such as data entry and server maintenance, not all is lost.


According to market analysis firm HfS Research, those in medium- to high-skilled jobs stand to gain from the trend towards automation.[xviii] In the next five years, the number of medium-skilled IT employees is slated to rise to 1 million from 900,000. For high-skilled employees, there is a more marked difference as the talent pool jumps to over half a million from 320,000.

Source: HfS Research.


According to San Francisco- and Bengaluru-based online professional skilling platform Simplilearn’s August 2017 report, new technologies will create employment in digital domains such as big data, AI, the internet of things (IoT), cloud computing and cybersecurity.


The roles that will have the most vacancies in the next few years are cloud computing consultants for Microsoft Azure and Amazon Web Services. The demand for data scientists and AI architects follow.


Source: Simplilearn.


These new-age jobs may be fewer in number compared to the hundreds of thousands of entry-level openings in the past, but the returns are favourable. “Say, if it’s eating away two jobs there the guys would earn INR 25,000, it’s creating on job where he will earn INR 50,000-60,0000, compelling people to become more productive,” Rituparna Chakraborty, co-founder and executive vice-president of HR TeamLease Services, told Quartz.[xix]


The country’s youth, too, is optimistic about the changing tides. Of 1,000 young professionals surveyed by Gurgaon-based education technology firm Talentedge, 83 percent of 21- to 24-year-olds were confident that automation will not render them obsolete. Across age groups, people either believed that they already had the skills to tackle automation or could up-skill and re-skill to do so.

Source: Talentedge India.


The need of the hour, therefore, is to re-skill workers. Corporations have already stepped up training within, but it is policy that can drive staggering changes on a state- or country-wide level, if done right.

Making Human Workers Viable

The government’s biggest and most well-recognised effort to keep the workforce relevant is its National Skills Development Mission.[xx] In July 2015, Prime Minister Narendra Modi officially launched the initiative, designed to “create convergence across sectors and states in terms of skill training activities.” It not only consolidates and coordinates skilling efforts, but also expedites decision-making across sectors to achieve skilling at a large scale with added speed while maintaining standards.


In October 2016, the union cabinet on economic affairs approved two new skill-development programmes[xxi] with a combined funding of INR 6,655 crore. INR 4,455 crore will go to SANKALP (Skills Acquisition and Knowledge Awareness for Livelihood Promotion) and INR 2,200 crore to STRIVE (Skill Strengthening for Industrial Value Enhancement). Both the schemes, also backed by the government in some capacity, have been put in place to introduce institutional reforms and improve the quality and market relevance of skill development training programmes. The latest infusion of cash has been backed by three other pre-existing organisations: National Skill Development Agency, NSDC, Directorate General of Training.


For individuals who cannot afford the cost of training upfront but wish to skill up, the government has established a special skilling loan.[xxii] Any Indian national who has “secured admission in a course run by Industrial Training Institutes (ITIs), Polytechnics or in a school recognised by central or State education Boards or in a college affiliated to recognised university, training partners affiliated to National Skill Development Corporation (NSDC)/Sector Skill Councils, State Skill Mission, State Skill Corporation, preferably leading to a certificate/diploma /degree issued by such organisation as per National Skill Qualification Framework (NSQF) is eligible for a Skilling Loan.” The scheme provides loans of INR 5,000 to INR 1,50,000. It covers not only tuition but also other “reasonable expenditure,” such as exam fees, library charges, lab fees and purchase of books.


As of July 2017, there are already as many as 200 Pradhan Mantri Kaushal Kendras (PMKKs) in 28 states that provide skill-based training. More than 13,000 ITIs—governmental and private—supporting over 23 lakh students “are being modernised and upgraded to institutes of great standards and technical support,” Rajiv Pratap Rudy, Minister of State (Independent Charge) for Skill Development and Entrepreneurship, told YourStory.[xxiii]


Unfortunately, these policies together with the government’s flagship programme to train 400 million people by 2022,[xxiv] are not readily converting into jobs.

Getting Ready for the Bots

Among the policies due for an update is the 2011 national manufacturing policy (NMP), which allows for some tax and other benefits to fuel growth in the sector, so manufacturing can contribute to a quarter of India’s GDP by 2022. In May 2017, Defence Minister Nirmala Sitharaman, who then held the post of commerce and industry minister, said that this framework was being revamped to account for a host of government initiatives such as Make in India, Digital India and Skill India.


By 2020, the industrial automation industry is set to surpass INR 197 billion[xxv] in value, growing at a CAGR of 12 percent[xxvi] for the second half of this decade. The Indian government’s Make in India plans to boost local manufacturing is slated to play a part in the rise of automation as is a rise in factory automation. India-headquartered companies such as Siemens and Schneider stand to gain from the ongoing revolution.


Another silver lining for India is its lead in technologies such as the IoT. Connecting countless everyday devices to the web, IoT blurs the lines between the physical and the online world. The technology has diverse applications ranging from a smaller scale, such as personal belongings and homes, to entire smart cities and environmental monitoring.[xxvii] The Narendra Modi government has allocated INR 500 crores to support the rollout of 5G[xxviii] in the country by 2020, a crucial network upgrade to support the IoT.


Indian technology firms are already doing IoT-related business worth $1.52 billion, accounting for the majority—44 percent—of the $3.5 billion global IoT technology services outsourcing market, an August 2017 report by Bengaluru-based research, consulting and advisory firm Zinnov noted.[xxix]


Source: Zinnov.


Major Indian states are already capitalising on the opportunity. Last year, the Andhra Pradesh state government approved the first-of-its-kind IoT policy[xxx] to become an IoT hub by 2020. Officials in Karnataka committed $6.1 million[xxxi] for the construction of a state-of-the-art AI and data-science hub. The former wants to create 50,000 jobs in the industry, while the latter is aiming for 35,000 vacancies for its data scientists.

Over the last few years, India has eased up on foreign-investment constraints. The Industrial Revolution 4.0—moving from simple digitisation to innovation based on a combination of technologies[xxxii]—is digging its feet into the growing economy. “In this debate, the Industrial Revolution 4.0 is rapidly catching up. Whether you like it or not, some industries are bringing in robotics in a very big way. Some partly make use of it while others have not been impacted by this because they cannot afford it or they do not want it. But we have to have a place for all the three,” said Sitharaman.[xxxiii] In addition to outsourcing, policies are being put in place to create a robust IoT ecosystem within India.

“The Indian government’s plan of developing 100 smart cities in the country, for which INR 7,060 crore has been allocated in the current budget could lead to a massive and quick expansion of IoT in the country,” the Ministry of Electronics and Information Technology (MeitY) noted in its IoT policy.[xxxiv] The governmental body is aiming to create an IoT industry worth $1.5 billion by 2020. To achieve this rapid scaling up, the government has allocated INR 3 crore to Education and Research Network, India’s autonomous scientific society under MeitY. INR 1 crore each will also be given to 15 academic or institutional partners to fund the creation of resource centres and test beds.

AI, too, is in need of a supportive environment. A joint paper from 2017, by India’s IT industry body NASSCOM and London-headquartered consulting firm PricewaterhouseCoopers (PwC),[xxxv] stated that the government should use policy to promote AI in the country to benefit the three aforementioned schemes. As the West begins to establish laws about driverless cars and drones, India must catch up. “Instead of waiting for technology to reach a level where regulatory intervention becomes necessary, India could be a frontrunner by establishing a legal infrastructure in advance,” NASSCOM and PwC noted. “Alternatively, early public-sector interest in AI could trigger a spurt of activity in the AI field in India.” The two entities further added that government backing could help incubate AI-based research and training, e.g. making effective training data sets from public portals and allowing access to open-source software libraries, toolkits and development tools with low-cost code repositories and development languages.

The government is finally giving the IT industry its due attention. It is setting up an expert committee[xxxvi] to advise the IT ministry on issues pertaining to workforce, privacy, security and more. In addition to encouraging budding industries, governments should strive to make technology a way of life for current students. Below are some of the recommendations[xxxvii] the All India Management Association (the national apex body of the management profession in India), along with the Boston Consulting Group, has made to the central and state governments across various fronts to improve higher education, technical education and the field of IT overall:

  • Establish a process for private sector players to commercialise research (to increase private investment in R&D);
  • Increase autonomy of existing institutes in areas like designing academic curriculum, managing infrastructure, and managing and retaining faculty;
  • Promote relevance (through modification of curriculum) and quality (upgrade infrastructure and training of teachers);
  • Allot funds to provide internet and intranet to all higher-education institutes to promote familiarity with IT;
  • Introduce courses in fields such as biotechnology, bio-informatics, nanotechnology, advanced new materials technology and alternate energy sources;
  • Set up a central body to identify upcoming fields in technology to incorporate them into the curriculum;
  • Develop schemes to expand, develop and retain the faculty in technical and management institutes;
  • Connect institutes and create common laboratories to share knowledge and optimise resources;
  • Offer industry-oriented and practice-based technician degree programmes in selected polytechnics; and
  • Set up technology parks, such as Hyderabad for IT companies.

The Roadmap Ahead

India has started considering the next onslaught of technologies and shows readiness to prepare for it. Yet, most of the government backing and policies are under construction. From waiting on experts to comment on AI to investigating the rollout of 5G, India’s tryst with new technologies is still in nascent stages.

The country should try to implement the policies before the technologies come in. Robust frameworks could lead the way in terms of establishing the use of the tech not only from a government perspective but also from the perspective of companies and consumers. This is especially important because much of the emerging technologies, from big data analytics to artificial intelligence, rely on massive data banks to hone their systems. The government’s role could be to offer access to large public databases and lay down the rules for proper, legal data integrity and use.

In addition to shaping policies, the government should look at providing incentives, just as it provides loans and grants to training institutes that churn out employable graduates and offers tax benefits under the NMP. For instance, the government is capable of calculating the optimal deployment and use of 5G, but—given that massive debts[xxxviii] have piled up in India’s $50-billion telecom industry, and in the last 4G spectrum, 60 percent of the block[xxxix] went unsold—there’s little proof that an actual transition to the network is on the cards.

After addressing core infrastructure issues, the government must also assess the state of the labour force. Devashish Mitra, a professor of Economics at Syracuse University, explains the cumbersome nature of the existing laws in a World Bank blog post:

“There are 200 labour laws in India, including 52 Central Acts.[xl] Probably, the three most restrictive acts are the Industrial Disputes Act (IDA), the Industrial Employment (Standing Orders) Act and the Trade Union Act. The IDA requires firms with more than 100 workers to seek permission from their respective state governments for retrenchment or laying off of workers. This is seldom granted. The Industrial Employment (Standing Orders) Act requires such firms to ask for permission even for modifications in job descriptions. The Trade Union Act lets any seven workers within a firm form a union, which leads to multiple labour unions. In addition, this act provides each such union the right to strike and to represent workers in legal disputes with employers.”

As the poor recruitment numbers show, merely skilling is not enough. With 15 million freelancers,[xli] second only to the US, it is imperative that governments ease up labour laws to help companies hire and let go off talent as and when needed. This is particularly important at a time when techies equipped with new-age skills are looking to become independent workers collaborating with multiple companies instead of committing to one as a full-time employee.

Overall, the rise of robots has prompted India to take a hard look at the future of its humans, and the policies need to catch up faster.


[i] Katie Allen, “Technology Has Created More Jobs than It Has Destroyed, Says 140 Years of Data,” The Guardian, 18 August 2015,

[ii] Venkatesh Ganesh, “Automation to Kill 70% of IT Jobs,” The Hindu Business Line, 14 November 2017,

[iii] ManpowerGroup, “The Skills Revolution: Digitization and why skills and talent matter,” 2017,

[iv] Sanjana Ray, “Infosys Says It Has Released 11,000 Jobs Due to Automation,”, 26 June 2017,

[v] Kunal Anand, “3000 Engineers Freed Up At Wipro After Artificial Intelligence Learns To Do Their Work!” Indiatimes, 10 June 2016,

[vi] “News,” HfS Research, 15 May 2017,

[vii] “Robotic Process Automation for Financial Services,” Capgemini Worldwide,

[viii] Sonali Shukla and Joel Rebello, “Threat of Automation: Robotics and Artificial Intelligence to Reduce Job Opportunities at Top Banks,” The Economic Times, 3 May 2017,

[ix] Aakash Sinha, “India in 10 Years: The Bots Are Coming, and It’s Good News,” LiveMint, 3 February 2017,

[x] Richa Bhatia, “India’s Warehouse Automation Is at Its Peak as Industries Gear up to Meet Fulfilment Demand,” Analytics India Magazine, 24 October 2017,

[xi] Harsh Mander, “Job Creation in High-Growth India Should Be a Top Priority,” Hindustan Times, 23 May 2017,

[xii] Surabhi/Aditi Nigam, “Just about Half the Candidates Who Get Skilled Land Jobs,” The Hindu Business Line, 9 March 2017,

[xiii] Ministry of Skill Development and Entrepreneurship,

[xiv] Rupali Mukherjee, “Indian Employers Suffer Talent Shortage in Accounting, Finance and IT: Survey – Times of India,” The Times of India, 18 October 2016,

[xv] Niall MacLeod et al., Tiger Sparks: Is Asia’s Innovation Boom Creating a New World Order? (UBS, 25 September 2017),

[xvi] Shelly Walia and Manu Balachandran, “These Ten Guys Aced the IIT Entrance Exam. Here’s What They’re Doing after Graduation,” Quartz, 18 March 2015,

[xvii] “Poor Show in World Rankings: Government Has a Mega Plan to Boost Higher Education,” The Economic Times,

[xviii] “Impact of Automation and AI on Services Jobs, 2016-2022,” HfS Research, 4 September 2017,

[xix] Ananya Bhattacharya, “Technology Will Continue to Kill IT Jobs-but There’s Still Hope for Indian Engineers,” Quartz, 9 October 2017,

[xx] Ministry of Skill Development and Entrepreneurship,

[xxi] “Rs 6,655 Crore Schemes to Boost Skill India Mission Get Cabinet Nod,” The Economic Times,

[xxii] “Skill Development Loan,” Skill Development Loan – Get Loans To Upgrade Your Skills : Get the Best Interest Rates on Deposits from the Best Indian Bank for NRI Deposits,

[xxiii] Sneh Singh, “Exclusive: Rajiv Pratap Rudy on How Skill India Mission Aims to Make Us the Skill Capital of the World,”, 19 July 2017,

[xxiv] Various Reporters, “India Launches Mission to Skill 400 Million by 2022,” Business Standard, 16 July 2015,

[xxv] “India Industrial Automation Industry Is Expected to Reach INR 197 Billion by 2020 with Growth Driven by Rapid Adoption of Modern Technology Backed by Cost Saving Features: Ken Research,” Ken Research.

[xxvi] “Global & Country Specific In-depth Market Analysis,” India Factory Automation Market by Type 2020, TechSci Research, September 2015,

[xxvii] Aritra Sarkhel, “There’s an Internet of Things Blueprint for a Clean Ganga,” The Economic Times, 2017,; Kalyan Parbat, “Telecom Sector Reels under Heavy Debt and Falling Revenue,” The Economic Times, 17 June 2017,

[xxviii] Ananya Bhattacharya, “India’s Big Push for 5G Is Great on Paper but Too Ambitious in Practice,” Quartz, 24 October 2017,

[xxix] “Zinnov Zones 2017 for IoT Technology Services,” Zinnov, 4 August 2017,

[xxx] “Andhra Aims to Become India’s IoT Hub; Approves First-of-Its-Kind Policy,”, 3 March 2016,

[xxxi] M. Devan, “Karnataka to Invest $6 Million to Set up AI and Data Science Hub,” The News Minute, 4 October 2017,

[xxxii]        Klaus Schwab, World Economic Forum, 2016,

[xxxiii] PTI, “Govt Modifying ‘2011 Vintage’ National Manufacturing Policy,” The Hindu Business Line, 18 May 2017,

[xxxiv] “IoT Policy Document,” Ministry of Electronics & Information Technology.

[xxxv] “Artificial Intelligence and Robotics – 2017 Leveraging Artificial Intelligence and Robotics for Sustainable Growth,” Assocham India and PwC, March 2017.

[xxxvi] P. Suchetana Ray and Sarika Malhotra, “Govt Sets up Expert Group for Suggestions on Artificial Intelligence Policy,” Hindustan Times, 20 October 2017,

[xxxvii] “India’s New Opportunity—2020,” The Boston Consulting Group and Confederation of Indian Agency, IBEF.

[xxxviii] Kalyan Parbat, “Telecom Sector Reels under Heavy Debt and Falling Revenue,” The Economic Times, 17 June 2017,

[xxxix] Rishi Iyengar, “Why India’s 4G License Auction Was a Flop,” CNNMoney, 7 October 2016,

[xl] Jagdish Bhagwati and Arvind Panagariya, “Why Growth Matters: How Economic Growth in India Reduced Poverty and the Lessons for Other Developing Countries,” 2013.

[xli] “India,” 2018 Marketplace Expansion Index, 2017,



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