India is expected to record the highest salary growth among major economies in 2026, according to the latest findings from the Annual Salary Increase and Turnover Survey conducted by global professional services firm Aon.
The survey forecasts that salaried employees in India will receive an average salary increase of 9.1% in 2026, slightly higher than the 8.9% increase recorded in 2025. The continued upward trend reflects strong corporate demand for skilled talent and confidence in India’s economic growth.
The report, now in its 32nd edition, is regarded as one of the most comprehensive compensation studies in the country. It analysed salary data from more than 1,400 companies across 45 industries, offering detailed insights into pay trends across sectors.
Experts say the projected growth highlights the resilience of India’s job market despite global economic uncertainty and slower salary growth in many developed nations.
Why Salaries in India Are Rising
India continues to outpace many global economies in wage growth as companies aggressively compete to attract and retain skilled professionals.
Businesses are increasingly investing in talent, especially in sectors connected to technology, engineering, infrastructure, and customer-focused roles. As companies expand their digital capabilities and scale operations, demand for highly skilled workers has intensified.
The survey found that industries such as non-banking financial companies (NBFCs), real estate, and infrastructure are expected to witness the highest salary increases in 2026.
Other sectors projected to see above-average salary growth include:
- Retail
- Engineering and manufacturing
- Automotive and vehicle manufacturing
- Engineering design services
These trends suggest that organizations are prioritizing employees with specialized technical skills, digital expertise, and engineering capabilities as the competition for qualified talent intensifies.
Salary Hike Projections by Industry
The survey indicates that pay increases will vary significantly across industries depending on business growth, hiring demand, and talent shortages.
| Industry | Actual Salary Increase 2025 (%) | Projected Salary Increase 2026 (%) |
|---|---|---|
| Overall, India | 8.9 | 9.1 |
| Automotive / Vehicle Manufacturing | 9.8 | 9.9 |
| Banking | 8.4 | 8.8 |
| Chemicals | 8.5 | 8.3 |
| E-commerce | 8.7 | 8.8 |
| Energy (Oil / Gas / Power) | 9.3 | 9.4 |
| Engineering Design Services | 10.0 | 9.9 |
| Engineering / Manufacturing | 9.4 | 9.5 |
| Fast Moving Consumer Goods (FMCG) | 8.9 | 9.1 |
| Funds and Asset Management | 9.7 | 8.5 |
| Global Capability Centres | 9.2 | 9.3 |
| Life Insurance | 8.2 | 8.2 |
| Life Sciences | 9.3 | 9.4 |
| NBFCs | 9.7 | 10.1 |
| Real Estate / Infrastructure | 10.5 | 10.2 |
According to the data, NBFCs and the real estate sector are likely to lead salary growth, with pay hikes expected to reach around 10%, making them among the fastest-growing wage sectors in India.
India vs Global Salary Growth
While many developed economies are experiencing slower wage growth due to economic uncertainty and cautious corporate spending, India continues to lead globally.
| Country | Projected Salary Increase 2026 (%) |
|---|---|
| India | 9.1 |
| Brazil | 4.9 |
| China | 4.8 |
| United States | 4.3 |
| Singapore | 4.2 |
| United Kingdom | 4.1 |
| Germany | 3.9 |
| Australia | 3.9 |
| Japan | 3.7 |
The large gap between India and other major economies highlights the country’s growing importance as a global talent hub.
Rapid expansion in industries such as technology, financial services, manufacturing, and infrastructure is driving strong demand for skilled professionals across the country.
Additionally, India’s economic outlook remains positive. The country’s GDP is projected to grow around 6.2% in 2026, significantly higher than many developed economies where growth remains relatively slow.
What the Salary Growth Means for Employees
Although salary increases are no longer as high as the double-digit spikes seen during the post-pandemic “Great Resignation” period, companies are still offering competitive compensation packages.
Industry experts say organizations are becoming more strategic in how they allocate salary increases. Instead of across-the-board hikes, companies are focusing more on:
- Critical business roles
- Emerging technology skills
- Digital and engineering expertise
- Long-term workforce stability
For employees, the projected 9.1% salary growth signals continued strength in India’s job market and reinforces the country’s reputation as one of the fastest-growing employment markets in the world.
As businesses expand and competition for skilled talent intensifies, professionals with specialised skills and future-ready capabilities are likely to benefit the most from the rising salary trends.
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