Artificial Intelligence (AI) is creating major disruptions in the technology sector, and if large-scale changes unfold, the Economic Survey 2025–26 warns that conditions could become worse than the 2008 global financial crisis. It cautioned that India’s IT-driven white-collar jobs face a direct threat. While the probability of such a scenario is estimated at 10–20 percent, the survey noted that the potential impact could be severe.
The latest Economic Survey stated that white-collar employment in India is heavily dependent on the IT sector, and the entry of AI could significantly affect this workforce. Though jobs will not disappear overnight, employment opportunities are already declining, with AI replacing roles in certain segments. India’s advantage of providing low-cost IT services to foreign companies is also under threat, as AI can perform many of these tasks faster and at lower cost. To navigate this transition and protect jobs, the survey proposed setting up an AI Economic Council to guide policy and workforce adaptation.
The survey also warned of rising geopolitical competition globally, increasingly complex security conditions in Europe, and growing political self-interest shaping trade policies. It highlighted financial risks stemming from heavy investments in technology. Meanwhile, gold prices rising from $2,607 per ounce to $4,315 in 2025 reflect a weakening dollar, with further increases expected in 2026—signaling investor anxiety. While companies are pouring massive investments into AI in hopes of sharp productivity gains, any correction in this sector could impact capital flows into markets like India. Despite these risks, the survey noted that India’s economic fundamentals, large domestic market, and substantial foreign exchange reserves could act as buffers, urging long-term strategies to address emerging challenges.