There was a time when calling customer care almost always meant waiting to speak to a person. Today, that experience looks very different. Whether you are tracking a delayed parcel or reporting a failed payment, chances are your first conversation is with a chatbot or an AI-powered voice assistant. Many routine issues are now resolved without a human ever joining the conversation.For customers, this often means quicker responses and round-the-clock support. For businesses, it promises lower costs and faster service. But the shift goes far beyond convenience. As artificial intelligence takes over repetitive tasks, it is reshaping India’s business process outsourcing (BPO) and customer service industry, pushing human agents towards more complex work while raising fresh questions about jobs, skills and data privacy.So, is AI signalling the beginning of the end for traditional call centres, or is it simply redefining what customer service will look like in the years ahead?
AI is already answering before humans do
The shift to AI-powered customer service is no longer a future prediction; it is already underway.Across industries, customers are increasingly greeted by chatbots or AI-powered voice assistants before they ever reach a human agent.Today, AI can direct customers to the right department, create support tickets, summarise previous interactions, translate conversations across multiple languages and complete post-call documentation, automating many repetitive tasks that once required human agents.Explaining how AI decides whether to continue a conversation or involve a human, data scientist Vishnu Prasad Sharma says the decision depends on two factors: “whether the LLM is confident enough in its answer given the data it has retrieved, and whether the conversation itself is of a nature that warrants a human.” He explains that chatbots use intent recognition and retrieve relevant company documents or past interactions before generating a response.For businesses, this means shorter waiting times, round-the-clock support and lower operating costs, while customers often receive faster responses.The pace of adoption is accelerating. According to research firm Gartner, 85 per cent of customer service leaders are either exploring, piloting or deploying AI chatbots, while 71 per cent of customer relationship management leaders plan to increase investments in AI.
Gartner also estimates that by 2029, AI could autonomously resolve nearly 80 per cent of common customer service issues, reflecting the growing confidence businesses are placing in the technology.Yet automation has not eliminated the need for people. Instead, it has shifted human agents towards handling the cases AI cannot resolve—complex issues that require judgement, problem-solving or empathy.That pattern is already familiar to many customers. Delhi-based public relations professional Mohit Kumar says he usually prefers AI-powered support for simple requests because it offers quick answers. However, while trying to book a stay during a trip to Varanasi, he was connected to an automated voice assistant that repeatedly failed to understand his questions about room availability and check-in timings. Frustrated by the experience, he eventually chose another accommodation. “AI works well for simple queries, but when a conversation becomes more detailed, talking to a person still makes all the difference,” Mohit told TOI.
The biggest shift isn’t fewer calls — it’s different calls
The biggest change in customer service may not be the number of calls being answered, but the kind of calls that reach human agents.Tasks that once occupied a large part of a customer service representative’s day such as answering FAQs, processing refunds, tracking orders or helping customers reset passwords are increasingly being handled by AI-powered systems.What reaches a human agent today is often more complex. These conversations may involve situations where customers are frustrated and expect someone to listen, understand and make a judgement call. In such cases, solving the problem is only one part of the interaction; building trust and reassuring the customer can be equally important.
Research supports the value of this human connection. A Harvard Business Review study found that customers who had positive emotional experiences with a company were 3.5 times more likely to make another purchase and five times more likely to recommend the business to others. While AI can deliver speed and consistency, customer loyalty is often built through empathy, active listening and personalised support, qualities that remain difficult to replicate fully through automation.The shift is also reflected in the experience of people who have worked in customer support. A former customer executive at a fintech company, who requested anonymity, said customer expectations have changed significantly as more people now prefer AI-powered chatbots, FAQs and online support channels for simple queries because they offer instant responses. “However, I don’t think these channels have replaced human support entirely. When customers face complex issues, need personalised guidance or are dealing with sensitive financial matters, they still prefer speaking to a customer care representative,” she told TOI.AI may resolve issues faster. But in many situations, people still look to humans to resolve them better.The challenge, however, is not always whether customers speak to AI or a human, but whether someone takes ownership of the problem. Another public relations professional Durgesh Kumar Jha told TOI that while he still contacts customer care first, he often turns to social media if the issue remains unresolved. In one recent case involving a cafe chain, he had to explain his complaint again, even after being contacted by the company’s support team and he never received a follow-up. “Whether it’s AI or a human executive doesn’t matter as much as someone actually understanding the problem and seeing it through till it’s resolved,” Durgesh said.
India’s BPO industry is standing at a turning point
For decades, India has been the world’s preferred destination for customer support and business process outsourcing (BPO) services. Strong English-language skills, a large talent pool and competitive operating costs helped the country build an industry that today employs millions of people across customer support, data processing and back-office operations. According to industry estimates, the BPO segment alone employs around 1.65 million people in voice support, data processing and administrative roles.Cities such as Bengaluru, Hyderabad, Pune, Chennai, Gurugram and Noida have emerged as major outsourcing hubs.That model, however, is beginning to evolve. As businesses increasingly deploy AI-powered chatbots and virtual assistants to handle routine customer interactions, hiring across parts of the industry has started to slow. Companies are experimenting with AI agents that can answer common queries, while customer service teams are being redesigned around more specialised roles. Instead of recruiting large numbers of agents for repetitive voice processes, organisations are placing greater emphasis on employees who can resolve complex issues, supervise AI systems and deliver higher-value customer experiences.The shift does not necessarily point to the end of India’s BPO industry. Rather, it signals a transition in the kind of work the sector will demand. For a workforce that has long relied on communication skills and process efficiency, adaptability, digital literacy and the ability to work alongside AI are becoming equally important.The question, therefore, is no longer whether AI will change customer service jobs. It is what those jobs will look like in the years ahead.
New skills are becoming as important as communication skills
For years, success in the customer service industry depended largely on clear communication, patience, product knowledge and the ability to follow well-defined processes.As AI becomes part of everyday operations, those expectations are expanding. Agents are increasingly expected to work with AI-powered tools, verify AI-generated information, handle escalated cases and make decisions when automation falls short.
Rather than spending time on repetitive tasks, many are focusing on problem-solving, critical thinking, quality assurance and delivering personalised support during complex interactions.The shift is also creating new responsibilities within customer service teams. Experienced agents are helping monitor automated interactions, review AI-assisted responses, identify errors and ensure customer conversations meet quality and compliance standards. As organisations continue integrating AI into their workflows, the role of the human agent is gradually moving from executing routine processes to supervising and complementing them.Communication remains essential, but today it sits alongside digital literacy, adaptability and the ability to collaborate with AI.Drawing on her experience, the former employee said AI can efficiently handle routine requests such as password resets, account-related queries, basic troubleshooting and service requests. “However, situations involving complex problem-solving, complaints, exceptions or emotionally distressed customers still require human support. Empathy, active listening and the ability to make judgement calls are qualities AI cannot fully replace,” she said.The headset is not disappearing. But the work behind it is changing.
AI still has limits
Despite rapid advances, AI is not without its shortcomings. While it performs well in handling structured and repetitive queries, customer service becomes far more challenging when conversations involve ambiguity, emotion or situations that fall outside predefined patterns.AI systems can generate incorrect or misleading responses, a phenomenon commonly known as ‘hallucination’. They may misunderstand the context of a conversation, struggle to interpret humour, sarcasm or cultural references and find it difficult to respond appropriately when customers are distressed or dealing with sensitive issues. In such cases, human agents are often required to step in.
Language remains another challenge. India is home to hundreds of languages, dialects and accents, making speech recognition a complex task. According to Probir Roy Chowdhury, Partner at JSA Advocates and Solicitors, one of the biggest privacy risks is that people often end up sharing far more personal information with AI chatbots than they realise. “In India, primary accountability will usually sit with the company that deploys the chatbot to consumers, because it controls the customer interface, determines the purpose and means of processing personal data, and represents the service to the consumer,” Chowdhury explains.Sharma says AI still struggles when conversations require context beyond the information available to the chatbot. “There are those times as well when LLM answers confidently i.e., hallucinates even though it’s not what the user asked,” he says, explaining why human agents remain essential for complex or sensitive conversations.
So…will AI replace call centres?
For years, customer service followed a simple model: a customer called, a human answered and technology worked quietly in the background.That balance is now shifting. AI is increasingly becoming the first point of contact, handling routine queries, sorting requests and resolving straightforward issues before they ever reach a person.
Human agents are stepping in only when conversations demand judgement, empathy or problem-solving beyond what algorithms can offer.That does not necessarily mean call centres are disappearing. Instead, the nature of the work is changing. As AI takes over repetitive, rules-based tasks, human agents are handling a smaller but more complex share of interactions.This also means companies will need to invest in employee upskilling alongside the responsible deployment of AI, ensuring that people and technology evolve together.The challenge is no longer choosing between people and machines, but deciding how the two can work together effectively.The future of customer service is therefore unlikely to be defined by human versus AI. Instead, it is increasingly becoming AI-first, with humans providing the expertise, empathy and oversight that technology still cannot fully replicate.
