India’s aspirations in AI depend on transforming 200 million workers into 350 million.

      Sandip Patel from IBM India believes that by 2030, the country could establish itself as the global capital for AI skills. However, the pathway to achieving this is more complex than the optimistic figures imply.

      India has around six hundred million workers, and during a recent morning in Bengaluru, Patel highlighted how many of them possess sufficient knowledge of artificial intelligence to contribute meaningfully to the emerging economy: two hundred million, which represents roughly thirty percent of the workforce. He stated to Reuters on Monday that this demographic opportunity is also central to the challenges faced. “The potential of that demographic dividend is remarkable, and unlocking it represents a tremendous opportunity,” Patel noted.

      According to Patel, “You could achieve a workforce of 350 million trained in AI that can operate not only domestically but across the globe.” This estimate stems from a collaborative study by IBM’s Institute for Business Value and IndiaAI, released earlier this month, which projects that AI might contribute over $500 billion to India's economy by 2030.

      To realize this potential, the portion of India’s tech workforce that is AI-literate must increase from about thirty percent today to nearly fifty-seven percent by the decade's end. This signifies a need to bridge the gap between 200 million and 350 million workers within less than five years.

      The challenge is systemic. India annually produces millions of engineers, many of whom find employment in the IT services sector that has earned the country its reputation as the global back office. However, these positions are now under threat from generative AI, which is automating tasks such as coding, ticket management, and junior analyst roles that previously expanded with workforce size. Patel acknowledged this by stating, “AI is enhancing productivity, reshaping job roles, and requiring the emergence of new skillsets that individuals must learn, resulting in the creation of new jobs,” as he shared with ANI at the report's launch.

      The report provides a more straightforward perspective compared to Patel's cautious tone. It reveals that seventy-two percent of surveyed organizations recognize they lag behind their international counterparts in adopting AI. A mere fifteen percent are effectively scaling AI through cross-functional investments, while the remaining eighty-five percent remain caught in pilot programs.

      This gap in execution is not exclusive to India; similar trends exist in Brussels, where Eurostat reported in December that only one-fifth of EU companies are utilizing AI, and European leaders identify skill shortages as a primary challenge, second only to regulation.

      What sets India apart is its demographic profile, with over half of its 1.4 billion citizens under the age of thirty. The government’s IndiaAI FutureSkills initiative aims to convert this demographic advantage into widespread AI literacy, with the expansion of data and AI labs into Tier 2 and Tier 3 cities. IBM, which pledged in December to train five million Indians in AI, cybersecurity, and quantum computing by 2030 through its SkillsBuild platform, is a key player in this initiative.

      The company has been subtly extending its presence beyond Bengaluru and Hyderabad by expanding in Kochi to around four thousand employees in just two years and establishing a foothold in Lucknow.

      Patel also emphasized a less frequently discussed aspect of the AI and jobs debate: the significance of intellectual property. He noted that for India to transition from being the world’s back office to developing its own monetizable technology, stronger IP enforcement is essential.

      If the forthcoming decade’s AI value is channeled to the companies holding the models, a nation that educates the workforce but lacks ownership of the IP will once again find itself operationalizing another's products. It becomes clear that skill capital and model capital are distinct entities, and according to Monday's discussions, India aspires to excel in both.