Sonal Varma

India's economy is holding up. But economists see headwinds building for FY28 cnbctv18.com/economy/india-e…

Can India turn AI disruption into job growth? India has become the world’s most important test case for AI’s impact on employment. With 6 million IT workers spanning BPO operations and knowledge-intensive work in GCCs, the country faces a critical question: Can the world’s back office survive the automation wave? A K-shaped impact Our analysis of AI-linked hiring and layoffs shows that India has recorded net job gains. But the headline masks a K-shaped reality: routine and entry-level jobs are under pressure, while demand for experienced workers and AI skills is rising. The bigger risk is the silent decline in fresh graduate hiring. The J-curve opportunity Most jobs created by AI so far are directly linked to technology roles, while the broader employment spillovers have yet to materialise. This is India’s big opportunity. As AI adoption accelerates, new jobs could emerge through global AI implementation, domestic applications across sectors, and AI-enabled startups and SMEs. A narrow policy window Can India turn short-term disruption into medium-term job growth? Much depends on how quickly businesses and policymakers act on skills, education and AI diffusion. The window to act is narrow. My latest opinion piece in Nikkei Asia: asia.nikkei.com/opinion/can-…

Why this RBI cycle looks different @bsindia

Beyond the headlines, AI has added jobs in Asia—so far. Our research finds 131,000 documented AI-related hires, compared with 61,000 job losses. But the headline numbers conceal an increasingly uneven impact: • Job losses are concentrated in financial services and routine, lower-skilled technology roles. • More than 90% of new jobs are in the technology sector, particularly AI training, data annotation and data operations. • AI is creating a K-shaped labour market: entry-level hiring is weakening, while demand for experienced talent is rising. • India is ground zero for this disruption because of its large IT and back-office sector. The net impact has been positive so far, but reduced campus recruitment represents a less visible form of displacement. @Nomura nomuraconnects.com/focused-t…

Defence is becoming Asia’s next industrial policy Asia is in the middle of its biggest defence build-up in a generation. While security is the primary motivating force, defence is also emerging as the region's next industrial policy in a strategic bet that military spending can seed domestic champions, open export markets and generate technology spillovers. The push for defence indigenisation should boost growth, but more spending will also demand fiscal discipline. Walking the fiscal fine line carefully will be the challenge. businesstimes.com.sg/opinion…

Opinion: Strategic neutrality is Asia's new competitive advantage   Bottom-line: In this new era, strategic neutrality is not fence-sitting; it is sophisticated statecraft.   - The end of geography-neutral globalization: For decades, trade and FDI flows followed comparative advantage and cost efficiency. That world is gone. Today's supply chain shifts are driven by the imperative to diversify risk, and FDI follows geopolitical alignment. - Asia's dual dependence dilemma: Asia cannot choose sides because the US is the largest export market while China supplies indispensable intermediate goods, and chokepoints (rare earth processing, green tech, AI energy infrastructure) exist on both sides. - Strategic neutrality delivers measurable advantages: Singapore, Malaysia, Vietnam, and India top @Nomura’s FDI attractiveness scorecard, reflecting their ability to engage pragmatically with all major powers. - Risks of over-alignment: Forced investment in the US risks hollowing out domestic manufacturing, forfeiting productivity gains from local production, and creating BOP pressures. - Sector-differentiated neutrality: Maintaining neutrality is harder in strategic sectors (AI, semiconductors, advanced manufacturing), but countries can pursue differentiated strategies - aligning where necessary, while preserving autonomy elsewhere. - Strategic implications: For Asian policymakers, geopolitical positioning must be a core component of growth strategy. Countries that master this approach will capture disproportionate shares of investment, trade, and growth opportunities.   asia.nikkei.com/opinion/stra… @NikkeiAsia @Nomura @sharp_writing