AI is changing Asia’s jobs market: What it means for India

Asia has a tricky tightrope to walk as artificial intelligence (AI) reshapes its job market: creating enough jobs for a growing workforce while ensuring workers don’t get left behind as technology changes the rules of the game.The challenge is particularly significant for India, Indonesia and the Philippines, where expanding working-age populations need productive employment even as AI transforms industries expected to provide those jobs.The International Monetary Fund’s (IMF) October 2026 Regional Economic Outlook: Asia and Pacific points to a shift in employer demand since the launch of ChatGPT in November 2022. An analysis of approximately 40 million online job postings across 19 Asian economies found that demand for jobs more exposed to AI had declined by nearly 10 per cent compared with occupations less exposed to the technology.However, the trend does not suggest that AI is simply eliminating jobs. The report found that the decline in demand for workers in highly exposed occupations appears to have stabilised, despite significant advances in AI capabilities.Part of the changing employment landscape is being driven by demand for new technical skills. Prompt engineering, retrieval-augmented generation and AI agent development are among the areas creating new employment opportunities. Employers are looking for people who can put AI to practical use in business operations, integrate it into existing processes and improve productivity.Businesses using AI see stronger labour demandHow companies use the technology is emerging as an important factor in determining its employment impact. Around 6 per cent of firms in Asia explicitly seek AI skills in their job advertisements, according to the IMF report, highlighting the uneven pace of adoption across businesses.Firms that have adopted AI are seeing stronger growth in labour demand than those that have not. This pattern also holds for occupations highly exposed to automation, indicating that the technology can support human capabilities even as it reduces the demand for certain tasks.The employment effects of AI, therefore, vary according to how businesses incorporate it into their operations. Alongside the decline in demand for some AI-exposed occupations, the report identifies stronger labour demand growth among firms adopting the technology.Lower AI exposure may not be an advantage for India in the long runEmerging Asian economies, including India, may initially face less disruption because many workers are employed in agriculture and other sectors less exposed to AI. But this could create a longer-term difficulty if the technology makes it harder for workers to move into higher-productivity manufacturing and services.For countries with growing working-age populations, the challenge extends beyond protecting existing jobs. They must also create productive employment opportunities and enable workers to move into occupations that can support higher productivity.India, Indonesia and the Philippines will need to navigate these pressures as AI reshapes the sectors expected to employ their expanding workforces. The pace and effectiveness of adaptation by businesses, workers and economies will be crucial to how this transition unfolds.Skills and preparedness will shape the employment outlookThe IMF report places the emphasis on preparing workers and institutions for the changes ahead, rather than focusing solely on the adoption of AI. Education reform, reskilling, digital infrastructure and stronger labour-market institutions will be central to this effort.Businesses will need to invest in workers as they integrate AI into their operations. Governments, meanwhile, will have to prepare younger populations for changing skill requirements and evolving occupational opportunities.Asia’s ability to manage the transition will depend on how well it combines technological progress with workforce preparedness. Timely investment in skills could help the region use AI-driven changes to support productivity, innovation and sustainable employment, while keeping inclusive growth within reach.You use AI every day. Now get your AI Quotient. Take the AIQ test.