Moody’s Ratings said on 12 November 2026 that artificial intelligence could lift productivity and displace jobs in emerging markets with large IT services and business process outsourcing (BPO) sectors, but that neither effect is yet clearly visible in India. The assessment appears in its Global Emerging Markets Outlook 2027 report.

The rating agency named India and the Philippines as the emerging markets most exposed to AI because of their outsourcing-heavy services exports. The finding adds a macro view to a debate that has so far been led by industry, including Nasscom’s warning that AI could make freshers’ skills obsolete.

What Moody’s said about AI and India’s IT services jobs

“For EMs with significant levels of software or IT and business-process outsourcing exposures, AI could both raise productivity and create displacement risks,” Moody’s said. “But even for India and the Philippines, the potentially most-exposed EM countries, there is no current clear illustration of either trend.”

In other words, the agency sees the upside and the risk as real but not yet measurable in national data. That contrasts with firm-level studies, such as the BCG estimate that AI could wipe out $200 billion of IT services work by 2030, which model the shift before it shows up in employment figures.

Why compute and skills will decide who gains

Moody’s said that for most emerging markets, access to computing capacity, digital infrastructure and skills will increasingly determine how much of the AI dividend they can capture. Countries short on any of the three risk taking on the job disruption without the productivity gains.

That framing matches recent research on India’s position. A Rhodium Group report argued that India’s real AI edge lies in services rather than raw data centre capacity, while an IIT Madras CeRAI whitepaper found entry-level jobs most at risk as AI costs fall unevenly on the workforce.

The wider growth outlook

Moody’s expects growth across the largest emerging markets in 2027 to be broadly similar to 2026, with some upside if the Middle East conflict eases. It has already raised its forecast for India’s FY27 GDP growth to 7 per cent from 6.5 per cent.

• Commodity demand will keep supporting some metal and energy producers, though overall growth will be slow and uneven.
• Resilient consumer spending and foreign direct investment will support growth in several markets.
• Brazil, China and India are expected to add to public debt, with interest costs contributing more than deficits for China and India.

In a separate Global Sovereign Outlook, the agency listed weaker-than-expected returns on AI investment, with economic and financial spillovers, among the key risks for 2027, alongside higher interest rates and renewed geopolitical shocks. More detail is available from Moody’s Ratings.

What it means for Indian enterprises

For CIOs at Indian IT services firms, GCCs and BPO operators, the message is that the AI transition is still at the stage where choices on reskilling, compute access and workflow redesign will shape the outcome. The absence of a clear signal in national data is a window to prepare, not proof that disruption will not come.

Key takeaways

• Moody’s says AI could raise productivity and displace jobs in IT services and BPO-heavy emerging markets.
• India and the Philippines are the most exposed, but neither trend is clearly visible yet.
• Compute, digital infrastructure and skills will decide which countries capture AI gains.

Also read: Agentic AI to Reshape Over 10 Million Jobs in India by 2030

Featured image: 7 World Trade Center, New York, headquarters of Moody’s. Photo: Sweeneyr via Wikimedia Commons (CC BY-SA 3.0)

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