Salaries in India are expected to grow by 9% in 2026, slightly up from the actual 8.9% increase recorded in 2025, global professional services firm Aon plc said on Tuesday. Aon’s Annual Salary Increase and Turnover Survey 2025-26 India noted that the 2025 salary hike was one of the lowest since 2010, with real wage growth affected less due to easing inflation.
“With salary increases at their lowest in over a decade, organisations are focusing on strategic pay decisions. While overall wage growth is moderating, companies are allocating higher budgets to high performers and niche skill sets. This approach supports retention of critical talent and aligns compensation with evolving business priorities,” said Amit Otwani, Associate Partner, Talent Solutions, India.
Salary increases are projected to vary across industries, with real estate/infrastructure (10.9%) and nonbanking financial companies (NBFCs) (10%) seeing the highest increases in 2026. No other sector will see a double-digit salary hike.
The lowest salary hike in 2026 will again be seen in the technology consulting and services sector at 6.8%. Last fiscal, this sector witnessed a hike of 7%. Indian IT consulting companies are firing workforce and giving lower increments primarily due to a significant transformation driven by rapid AI adoption, changing client demands and an urgent need for cost optimization amid policy changes in its biggest market USA.
Automotive/vehicle manufacturing, engineering design services, retail and life sciences are also expected to continue rolling out slightly higher salary increases compared to other sectors in 2026, reflecting continued investment in critical talent pools.
Aon stated that trade disruptions driven by geopolitical tensions and supply chain vulnerabilities demand a rethink of workforce and rewards strategies. It added that rapid advances in AI and automation are transforming job roles and skills while introducing new vulnerabilities.
“As overall attrition rates decline, involuntary exits are subtly rising. This shift indicates that organizations are reassessing talent needs and strategically reshaping their workforce, often prioritizing new capabilities and performance standards to maintain competitiveness,” said Roopank Chaudhary, Partner and Rewards Consulting Leader, Talent Solutions, India.
Aon said that the overall attrition rates have declined to 17.1% in 2025, down from 17.7% in 2024 and 18.7% in 2023. The study, now in its 31st year, is one of the largest and most comprehensive rewards studies in India and analyses data from over 1,060 companies across 45 industries.
