AI boom, gig surge: India's job market is entering a new work order

India’s workforce is in the midst of a transformation. The recent India Skills Report 2026, The Future of Work – Gig Workforce, Freelancing, AI-Supplemented Workforce, Remote Work & Entrepreneurship, prepared by Educational Testing Service in collaboration with the Confederation of Indian Industry, the All India Council for Technical Education, and the Association of Indian Universities, captures this shift in detail. With employability rising to 56.35 per cent from 54.81 per cent last year, the report points to steady improvement in job readiness and skill adaptability. The study is based on employability tests and insights from over 1,000 organisations. 

The findings confirm India’s growing stature as a global talent hub. The country now accounts for about 16 per cent of the world’s artificial intelligence (AI) workforce, with over 600,000 professionals in the field and that number is expected to double by 2027. The digital and freelance economy too is expanding rapidly, and is projected to reach 23.5 million gig workers by 2030. AI-led recruitment, hybrid work models, and data-driven human-resource systems are redefining hiring across sectors. Nearly nine out of 10 employees now rely on generative AI tools in some form, an adoption rate that outpaces most developed economies. 

However, the new work order also exposes sharp vulnerabilities. The gig and platform economy, though celebrated for flexibility, still lies largely outside the reach of formal labour protections. Millions of delivery workers, freelancers, and platform-based professionals remain without insurance, provident fund, or mechanisms for redressing their grievances. Unless the regulatory framework evolves, flexibility may well translate into insecurity. The report’s call for portable benefits and fair work protocols, including skill-verified credentials and data protection norms, underlines the policy vacuum. Equally pressing is the emerging divide in skills. While AI is transforming productivity across industries, only a limited number of firms offer AI training at scale, creating an uneven digital literacy landscape. Large corporations are embracing automation and analytics, while small and medium enterprises struggle to adapt. Just as India’s services-led growth of the 1990s and 2000s created pockets of prosperity that excluded large sections of low-skilled and informal workers, AI-led growth risks reproducing that problematic pattern. The new wave of automation could widen inequalities that the services boom once did. 

Gender and regional disparities compound that challenge. Women’s employability, at 50.86 per cent, now nearly matches that of men, but access to high-growth sectors such as technology, manufacturing, and energy remains limited. Regional gaps persist, with Uttar Pradesh, Maharashtra, and Karnataka leading the employability charts while Bihar and the Northeast continue to lag. The next phase of India’s skills mission must focus as much on equity as on efficiency. To convert employability into meaningful employment, policy must catch up with the progress and changes taking place in the economy. A modern labour framework must recognise gig and remote work. The four Labour Codes awaiting implementation can be a start in this regard. Further, the promotion of ethical AI governance needs to ensure algorithmic transparency and fairness in recruitment and workplace management. Finally, reform in education and skilling should link classrooms with careers, moving toward project-based, industry-aligned learning.