India may face an AI talent shortfall of over 1 million by 2027: Report

India is poised to become a global AI talent hub, but a looming skill gap threatens to hinder its progress, with a new study by Bain & Company revealing that the country's AI sector could face a shortfall of over a million skilled professionals by 2027.

The report highlighted the urgent need for India to reskill and upskill its workforce to meet the growing demand for AI expertise.

"India has a unique opportunity to position itself as a global AI talent hub. However, by 2027, the job openings in AI are expected to be 1.52x of the talent availability. The challenge -- and opportunity -- lies in reskilling and upskilling a significant portion of the existing talent base on emerging technology tools and skillsets," said Saikat Banerjee, Partner and leader in Bain & Company's AI, Insights, and Solutions practice in India.

India's AI sector could surpass 2.3 million job openings by 2027 while the AI talent pool is expected to grow to around 1.2 million, presenting an opportunity to reskill more than 1 million workers, according to the report.

Since 2019, AI-related job postings have exploded, increasing by 21 per cent annually, while compensation for these roles has risen by 11 per cent each year.

Despite this surge in demand and attractive salaries, the supply of qualified AI professionals has not kept pace, creating a widening talent gap that risks slowing down AI adoption across industries.

Globally, executives surveyed cited a lack of in-house AI expertise as a major obstacle to implementing generative AI technologies. This shortage is projected to persist through at least 2027, with varying degrees of impact across global markets.

Addressing the AI talent shortage requires a multi-pronged approach -- companies must move beyond traditional hiring practices and prioritise continuous upskilling initiatives to cultivate internal talent.

"The AI talent shortage is a significant challenge, but not invincible. Addressing it requires a fundamental shift in how businesses attract, develop, and retain AI talent. Companies need to move beyond traditional hiring approaches, prioritise continuous upskilling, and foster an innovation-driven ecosystem," Banerjee said.