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At a startup office in this Indian city, developers are fine-tuning artificial-intelligence chatbots that talk and message like humans.\u00a0<\/p>\n
The company, LimeChat, has an audacious goal: to make customer-service jobs almost obsolete. It says its generative AI agents enable clients to slash by 80 per cent the number of workers needed to handle 10,000 monthly queries. <\/p>\n
\u201cOnce you hire a LimeChat agent, you never have to hire again,\u201d Nikhil Gupta, its 28-year-old co-founder, told Reuters<\/em>.<\/p>\n Cheap labour and English proficiency helped make India the world\u2019s back office \u2013 sometimes at the expense of workers elsewhere. Now, AI-powered systems are subsuming jobs done by headset-wearing graduates in technical support, customer care and data management, sparking a scramble to adapt, a Reuters <\/em>examination found. <\/p>\n That\u2019s driving business for AI startups that help companies slash staffing costs and scale operations \u2013 even though many consumers still prefer to deal with a person.<\/p>\n This account of the disruptive changes transforming India\u2019s US$283 billion IT sector is based on interviews with 30 people, including industry executives, recruiters, workers and current and former government officials.\u00a0<\/p>\n Reuters <\/em>also visited two AI startups and tested voice and text chatbots that handle increasingly sophisticated customer interactions in human-like ways.<\/p>\n Rather than pump the brakes as the technology threatens jobs built on routine tasks, the country is accelerating, wagering that a let-it-rip approach will create enough new opportunities to absorb those displaced, Reuters <\/em>found. <\/p>\n The outcome of India\u2019s gamble carries weight far beyond its borders \u2013 a test case for whether embracing AI-driven disruption can elevate a developing economy or render it a cautionary tale.<\/p>\n The global conversational AI market is growing 24 per cent a year and should reach US$41 billion by 2030, consultancy Grand View Research estimates.<\/p>\n India \u2013 which relies on IT for 7.5 per cent of its GDP \u2013 is leaning in. In a February speech, Prime Minister Narendra Modi said, \u201cWork does not disappear due to technology. Its nature changes and new types of jobs are created.\u201d<\/p>\n Not everyone shares Modi\u2019s confidence in India\u2019s preparedness. Santosh Mehrotra, a former Indian official and visiting professor at the University of Bath\u2019s Centre for Development Studies, criticised the government for a lack of urgency in assessing AI\u2019s effects on India\u2019s young workforce. \u201cThere\u2019s no game plan,\u201d he said.<\/p>\n Business process management employs 1.65 million workers in call centres, payroll, and data handling in India. Hiring has plummeted due to increased automation and digitalisation, despite rising demand for AI coordinators and process analysts, said Neeti Sharma, CEO of staffing firm TeamLease Digital.<\/p>\n Net headcount in the segment, which represents one-fifth of IT output, grew by fewer than 17,000 workers in each of the past two years, down from 130,000 in 2022-2023 and 177,000 in 2021-2022, TeamLease Digital figures show.<\/p>\n Reuters <\/em>spoke to three current and five former customer-service workers, who described increasing job insecurity and integration of AI, including tools that suggest responses and bots that handle nearly all routine queries autonomously.<\/p>\n Megha S., 32, was earning US$10,000 a year at a Bengaluru-based software solutions provider. She said she was laid off last month, just before India\u2019s festive season, as the company moved to implement AI tools to review the quality of sales calls.<\/p>\n \u201cI was told I am the first one who has been replaced by AI,\u201d said Megha, who spoke on the condition that her full name and former employer not be identified. \u201cI\u2019ve not told my parents.\u201d <\/p>\n Sumita Dawra, a former labour ministry secretary who oversaw an Indian government taskforce on AI\u2019s impact on the workforce before retiring in March, said while the technology offered productivity gains that would lead to new jobs, India could consider stronger social security measures, such as unemployment benefits, to help those displaced during the transition. <\/p>\n However, a senior Indian official told Reuters <\/em>the government believed AI would ultimately have little impact on overall employment. India\u2019s IT and labour ministries, and Modi\u2019s office, didn\u2019t respond to requests for comment.<\/p>\n Besides AI, factors clouding the outlook for India\u2019s IT sector include U.S. tariffs; a proposal by a U.S. lawmaker for a 25 per cent tax on firms using foreign outsourcing services; and President Trump\u2019s US$100,000 fee on new H-1B visas, which are widely used by tech firms to sponsor Indian workers.<\/p>\n Investment bank Jefferies predicted in September that India\u2019s call centres would face a revenue hit of 50 per cent \u2013 and around 35 per cent for other back-office functions \u2013 from AI adoption over the next five years. <\/p>\n That would spell near-term job losses in India, which accounts for 52 per cent of the global outsourcing market.<\/p>\n \u201cThe biggest impact is going to be on young students coming out of college,\u201d said Pramod Bhasin, who in the 1990s established India\u2019s first call centre with 18 employees for GE Capital, where workstations were partitioned by saris strung from the ceiling.<\/p>\n In the longer run, India could transition from \u201cback office\u201d to the world\u2019s \u201cAI factory\u201d by capitalising on demand for AI engineers and automation deployment, said Bhasin, who went on to found IT services firm Genpact.<\/p>\n One beneficiary of that demand is LimeChat, which Reuters <\/em>visited in August. Gupta, the co-founder, said his developers and engineers have helped automate 5,000 jobs across India. The company\u2019s bots handle 70 per cent of customer complaints for its clients, and it plans to achieve 90-95 per cent within a year, he said.<\/p>\n \u201cIf you\u2019re giving us 100,000 rupees per month, you are automating the job of at least 15 agents,\u201d said Gupta. At that price \u2014 about US$1,130 \u2014 the service costs roughly the same as three customer-care staff, he said.<\/p>\n LimeChat\u2019s sales soared to US$1.5 million in 2024 from US$79,000 two years earlier, regulatory disclosures show. Last year, the firm began integrating Microsoft\u2019s Azure language models and algorithms in a partnership to launch a new e-commerce chatbot.<\/p>\n Among Gupta\u2019s clients is Indian ayurvedic products firm Kapiva, which has deployed a LimeChat bot for customer interactions over WhatsApp. <\/p>\n Keying in a prompt \u2013 \u201cWhat kind of diet should I have to reduce weight?\u201d \u2013 yielded an AI meal-plan creator. A follow-up query in English and Hindi about how a slimming juice differs from another item was also answered, with the chatbot eventually sharing links to Kapiva products with a smiling emoji. Kapiva didn\u2019t respond to Reuters\u2019<\/em> questions.<\/p>\n LimeChat\u2019s rivals include Reliance, the conglomerate chaired by Mukesh Ambani, which acquired Indian startup Haptik in 2019. <\/p>\n Haptik says it offers \u201cAI agents that deliver human-like customer experiences\u201d that cost US$120 and can cut support costs by 30 per cent. Revenue skyrocketed to almost US$18 million last year from less than US$1 million in 2020, disclosures show. <\/p>\n Haptik promoted a webinar in September by posing the question: \u201cWhat if you had a full-time employee who never sleeps and costs just 10,000 rupees?\u201d <\/p>\n \u201cWe are seeing a huge shift,\u201d Haptik product manager Suji Ravi said in the webinar, which Reuters <\/em>reporters attended. \u201cBrands are not investing in human agents and they want to deploy AI agents.\u201d<\/p>\n For LimeChat client Mamaearth, an Indian personal-care brand, the main attraction of AI chatbots is scalability, said Vipul Maheshwari, head of product and analytics at parent firm Honasa Consumer.<\/p>\n \u201cProviding good customer support is make or break for us,\u201d he said. \u201cBut can we infinitely scale my customer support team? Absolutely not.\u201d<\/p>\n The chatbot used by Mamaearth could go beyond simple assistance like order tracking, and help users with queries such as recommending the right products during pregnancy or, in some cases, handle an agitated customer, Maheshwari said.<\/p>\n The promise and perils of AI are evident at The Media Ant. The Bengaluru-based advertising agency cut 40 per cent of its workforce to about 100 over the past year and vacated space in another building to save on rent, said founder Samir Chaudhary.<\/p>\n The firm eliminated 15 salespeople, replacing them with AI bots that identify leads and send emails to prospective customers, Chaudhary said. A six-member call centre was replaced with a voice agent called Neha that speaks in near-flawless, Indian-accented English.<\/p>\n When a Reuters <\/em>reporter asked Neha about advertising on YouTube, she sought details about the budget and target markets, noted the requirements, and ended the conversation cheerfully, \u201cI will email you the details … have a great day.\u201d<\/p>\n \u201cAsk her out for a coffee and she will laugh it off,\u201d Chaudhary said.<\/p>\n Yet the race to embrace AI isn\u2019t always smooth for companies.<\/p>\n Take Sweden\u2019s Klarna. Chatbots helped the fintech firm cut thousands of jobs last year, but its CEO told Reuters <\/em>in September the company is now \u201ctrying to course correct\u201d and use the technology to improve products rather than reduce costs.<\/p>\n Chatbots have limitations. While most generic e-commerce-related queries posed by a Reuters <\/em>reporter were handled well by LimeChat bots, some stumped them.<\/p>\n When LimeChat client Knya\u2019s bot was asked for proof of its claim that a million medical professionals trust its products, such as its stethoscopes, it replied: \u201cI am sorry, I don\u2019t have enough information to answer your question.\u201d Knya didn\u2019t respond to a request for comment.<\/p>\n Customer surveys show chatbots are still disliked by many.<\/p>\n An August 2024 EY survey of 1,000 Indian consumers found 62 per cent made purchases influenced by AI recommendations, compared with 30 per cent globally. Yet, \u201cthe desire for a human connection remains strong,\u201d EY noted, with 78 per cent preferring online platforms that provide human support.<\/p>\n LimeChat\u2019s Gupta, though, said well-trained AI agents could resolve queries faster than humans. He said many standard bots pass conversations to a human agent when they encounter angry customers, noting that \u201cYou need a very small number of people to just handle negative experiences.\u201d<\/p>\n In the 1990s and 2000s, India\u2019s tech boom fueled rural-to-urban migration. Cities like Bengaluru became outsourcing hubs as domestic firms, including Tata Consultancy Services, Infosys and Wipro, grew into global juggernauts.<\/p>\n That expansion trickled through to Ameerpet, a Hyderabad neighbourhood where university graduates fill classrooms to learn IT skills and earn certifications for tech jobs.<\/p>\n Ameerpet\u2019s training centres traditionally offered courses in Microsoft Office and programming languages like Java. Visiting in April, Reuters <\/em>found these centres are increasingly focused on AI training.<\/p>\n Outside one, Quality Thought, a banner featured a robot overlooking a globe with the letters \u201cAI\u201d.<\/p>\n The centre was offering a nine-month course in AI data science and prompt engineering for about US$1,360, more than double the price of a traditional web-development program.<\/p>\n \u201cRecruiters are asking for students with basic AI skills,\u201d staffer Priyanka Kandulapati said. \u201cWe are going to streamline our courses even further to suit the demand.\u201d<\/p>\n In a discussion with startup founders last month about the pace of change, venture capitalist Vinod Khosla, who co-founded Sun Microsystems, offered a stark view of the future for India.<\/p>\n \u201cAll IT services will be replaced in the next five years,\u201d he said. \u201cIt\u2019s going to be pretty chaotic.\u201d<\/p>\n Reporting by Munsif Vengattil in Bengaluru and Aditya Kalra in New Delhi. Additional reporting by Haripriya Suresh and Rishika Sadam in Hyderabad, Jatindra Dash in Bhubaneswar, Saurabh Sharma in Lucknow, Sai Ishwarbharath B in Bengaluru, and Praveen Paramasivam in Chennai; Editing by David Crawshaw.<\/em><\/p>\n The post Meet the AI chatbots replacing India\u2019s call-centre workers appeared first on Inside Retail Australia.<\/p>\nAutomated gold rush<\/h3>\n
Coffee with Neha<\/h3>\n
From Java to AI<\/h3>\n