For nearly two decades, India’s demographic dividend has occupied a central place in the country’s economic narrative. Policymakers, economists and investors have repeatedly argued that India’s greatest competitive advantage lies in its youthful population. While advanced economies such as Japan, Germany and Italy contend with ageing societies and shrinking workforces, India remains home to the world’s largest working-age population.

According to the United Nations Population Fund’s State of World Population Report 2023, nearly 68 per cent of Indians are between the ages of 15 and 64, giving the country a demographic profile unmatched by most major economies. But demographics are not destiny. They are an opportunity whose value depends entirely on the economic environment in which they operate. Artificial intelligence is now transforming that environment. The assumption that a large labour force will automatically translate into economic growth is becoming increasingly fragile as intelligent machines perform a growing range of cognitive and routine tasks.

India therefore faces a defining policy challenge: how to convert its demographic dividend into an AI dividend before technological disruption erodes one of its greatest strategic advantages. The debate around artificial intelligence in India is often dominated by fears of job losses. Those concerns are understandable but incomplete. AI will undoubtedly automate certain occupations, particularly repetitive white-collar work such as document processing, customer support, routine coding and administrative functions.

Goldman Sachs estimated in 2023 that generative AI could affect around 300 million full-time jobs globally, although many of these jobs are expected to evolve rather than disappear. The World Economic Forum’s Future of Jobs Report 2025 similarly projects that while AI and automation will displace millions of roles, they will also create new occupations requiring advanced digital, analytical and creative capabilities. The real risk for India is not unemployment alone; it is employability.

Every year, millions of young Indians enter the labour market. Yet several surveys continue to highlight a troubling mismatch between educational qualifications and workplace readiness. Reports by employability assessment firms have repeatedly shown that a significant proportion of graduates lack........

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