Indian artificial intelligence startup LimeChat claims its chatbot agents enable clients to reduce by 80 per cent the number of workers needed to handle 10,000 monthly customer queries, as automation transforms the country’s $283 billion IT sector.
The Bengaluru-based company represents a growing wave of AI firms helping businesses slash staffing costs whilst scaling operations, despite many consumers still preferring human interaction, reports Reuters.
“Once you hire a LimeChat agent, you never have to hire again,” Nikhil Gupta, the company’s 28-year-old co-founder, stated in an interview.
The development marks a significant shift for India’s call centre industry, which alongside English proficiency helped establish the country as the world’s back office. AI-powered systems now subsume jobs previously performed by headset-wearing graduates in technical support, customer care and data management, according to a Reuters examination based on interviews with 30 industry executives, recruiters, workers and government officials.
Business process management employs 1.65 million workers in call centres, payroll and data handling across India. Net headcount in the segment, representing 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, according to staffing firm TeamLease Digital figures.
“Hiring has plummeted due to increased automation and digitalisation, despite rising demand for AI coordinators and process analysts,” said Neeti Sharma, chief executive of TeamLease Digital.
Investment bank Jefferies predicted in September that India’s call centres would face a revenue hit of 50 per cent from AI adoption over the next five years, with around 35 per cent for other back-office functions. India accounts for 52 per cent of the global outsourcing market.
Rather than restraining the technology as it threatens jobs built on routine tasks, India is accelerating adoption, wagering that aggressive implementation will create sufficient new opportunities to absorb displaced workers, Reuters found. The outcome carries weight beyond India’s borders as a test case for whether embracing AI-driven disruption can elevate a developing economy.
“The biggest impact is going to be on young students coming out of college,” said Pramod Bhasin, who established India’s first call centre with 18 employees for GE Capital in the 1990s, where workstations were partitioned by saris strung from the ceiling.
In the longer term, India could transition from back office to the world’s “AI factory” by capitalising on demand for AI engineers and automation deployment, said Bhasin, who founded IT services firm Genpact, reported Reuters.
Prime Minister Narendra Modi stated in a February speech that “work does not disappear due to technology. Its nature changes and new types of jobs are created.” India relies on IT for 7.5 per cent of GDP.
Not everyone shares that confidence. Santosh Mehrotra, a former Indian official and visiting professor at the University of Bath’s Centre for Development Studies, criticised the government for lack of urgency in assessing AI’s effects on India’s young workforce. “There’s no gameplan,” he said.
Reuters spoke to three current and five former customer service workers who described increasing job insecurity and AI integration, including tools suggesting responses and bots handling nearly all routine queries autonomously.
Megha S., 32, earned $10,000 annually at a Bengaluru-based software solutions provider before being laid off last month as the company moved to implement AI tools reviewing sales call quality. “I was told I am the first one who has been replaced by AI,” said Megha, who spoke on condition her full name and former employer not be identified. “I’ve not told my parents.”
LimeChat’s developers and engineers have helped automate 5,000 jobs across India, according to Gupta. The company’s bots handle 70 per cent of customer complaints for clients, with plans to achieve 90 to 95 per cent within a year.
“If you’re giving us 100,000 rupees per month, you are automating the job of at least 15 agents,” Gupta stated. At approximately $1,130, the service costs roughly the same as three customer care staff.
LimeChat’s sales soared to $1.5 million in 2024 from $79,000 two years earlier, regulatory disclosures show. Last year the firm began integrating Microsoft’s Azure language models and algorithms in a partnership to launch a new e-commerce chatbot, reported Reuters.
Among Gupta’s clients is Indian ayurvedic products firm Kapiva, which deployed a LimeChat bot for customer interactions over WhatsApp. Testing the system with the prompt “What kind of diet should I have to reduce weight?” yielded an AI meal-plan creator. A follow-up query in English and Hindi about slimming juice differences was answered, with the chatbot eventually sharing Kapiva product links with a smiling emoji.
LimeChat’s rivals include Haptik, acquired by Reliance conglomerate in 2019, which says it offers “AI agents that deliver human-like customer experiences” costing $120 that can cut support costs by 30 per cent. Revenue increased to almost $18 million last year from less than $1 million in 2020, disclosures show.
Haptik promoted a September webinar by posing the question: “What if you had a full-time employee who never sleeps and costs just 10,000 rupees?”
“We are seeing a huge shift,” Haptik product manager Suji Ravi said in the webinar, which Reuters reporters attended. “Brands are not investing in human agents and they want to deploy AI agents.”
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. “Providing good customer support is make or break for us,” he said. “But can we infinitely scale my customer support team? Absolutely not.”
The chatbot used by Mamaearth could exceed simple assistance like order tracking, helping users with queries such as recommending appropriate products during pregnancy or handling agitated customers, Maheshwari stated.
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 approximately 100 over the past year and vacated space in another building to save on rent, said founder Samir Chaudhary.
The firm eliminated 15 salespeople, replacing them with AI bots identifying leads and sending emails to prospective customers. A six-member call centre was replaced with a voice agent called Neha speaking in near-flawless, Indian-accented English.
When a Reuters reporter asked Neha about advertising on YouTube, she sought details about budget and target markets, noted requirements, and ended the conversation cheerfully: “I will email you the details … have a great day.”
“Ask her out for a coffee and she will laugh it off,” Chaudhary said.
Yet the race to embrace AI is not always smooth. Sweden’s Klarna cut thousands of jobs last year using chatbots, but its chief executive told Reuters in September the company is now “trying to course correct” and use the technology to improve products rather than reduce costs.
Chatbots have limitations. Whilst most generic e-commerce queries posed by Reuters reporters were handled adequately by LimeChat bots, some stumped them. When LimeChat client Knya’s bot was asked for proof of claims that a million medical professionals trust its products, it replied: “I am sorry, I don’t have enough information to answer your question.”
Customer surveys show chatbots remain disliked by many. 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 “the desire for a human connection remains strong,” EY noted, with 78 per cent preferring online platforms providing human support.
LimeChat’s Gupta countered that well-trained AI agents could resolve queries faster than humans. He said many standard bots pass conversations to human agents when encountering angry customers. “You need a very small number of people to just handle negative experiences,” he stated.
Training centres in Hyderabad’s Ameerpet neighbourhood, traditionally offering courses in Microsoft Office and programming languages like Java, are increasingly focused on AI training. One centre, Quality Thought, was offering a 9-month course in AI data science and prompt engineering for approximately $1,360, more than double the price of a traditional web development programme.
“Recruiters are asking for students with basic AI skills,” staffer Priyanka Kandulapati said. “We are going to streamline our courses even further to suit the demand.”
The global conversational AI market is growing 24 per cent annually and should reach $41 billion by 2030, consultancy Grand View Research estimates.
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 India’s future. “All IT services will be replaced in the next five years,” he said. “It’s going to be pretty chaotic.”
A senior Indian official told Reuters the government believed AI would ultimately have little impact on overall employment. India’s IT and labour ministries, and Modi’s office, did not respond to requests for comment.
