Indian employees can look forward to a slightly brighter payday in 2026, with the average salary increase in India Inc projected to reach 9%. This forecast, revealed in the latest Annual Salary Increase and Turnover Survey by global professional services firm Aon, marks a marginal uptick from the 8.9% average hike recorded in 2025.
The projection signals a continued show of economic resilience in India, which remains robust despite prevailing global uncertainties and an overall slowdown in global economic growth.
Key Drivers of the Salary Growth
The anticipated 9% salary increase is largely attributed to India’s sustained economic momentum, supported by several key factors:
- Stable Domestic Consumption and Investments: Strong internal demand and consistent investment flows are foundational to the optimistic growth forecast.
- Supportive Policy Measures: Government policies, including significant infrastructure investments and recent tax reforms, are boosting business efficiency and incentivizing demand across key sectors.
- Focus on Critical Talent Pools: Companies are strategically investing higher compensation budgets in specialized and high-performing employees to ensure retention and maintain a competitive edge.
Sector-Specific Highlights: Real Estate and NBFCs to Lead the Way
While the overall market projects a 9% hike, the pay increases are expected to vary significantly across different industries, with growth-led and skill-scarce sectors leading the surge.
| Industry | Projected Salary Hike in 2026 (%) |
| Real Estate/Infrastructure | 10.9% |
| Non-Banking Financial Companies (NBFCs) | 10.0% |
| Engineering Design Services | 9.7% |
| Automotive/Vehicle Manufacturing | 9.6% |
| Retail & Life Sciences | 9.6% (each) |
| Overall India Average | 9.0% |
The real estate and infrastructure sector is expected to top the list with an impressive 10.9% projected increase, followed closely by Non-Banking Financial Companies (NBFCs) at 10.0%. This highlights the strategic importance companies in these high-growth sectors place on talent acquisition and retention.
Conversely, some sectors, such as Technology Consulting and Services, are projected to see lower increases at around 6.8%, reflecting ongoing pressures from the export slowdown, cost optimization efforts, and the disruptive impact of AI and automation on traditional IT roles.
Workforce Stability on the Rise
In a positive sign for the talent landscape, the survey also reported a notable improvement in workforce stability. Overall attrition rates are expected to decline to 17.1% in 2025, down from 17.7% in 2024 and a high of 18.7% in 2023.
Industry experts believe that the moderation in attrition—coupled with a slight rise in involuntary exits—indicates a shift towards a more performance-driven and stable talent market. Improved retention rates are now allowing organizations to pivot their focus toward targeted skill development and long-term talent building rather than constant backfilling of positions.
“India’s growth story remains strong, supported by infrastructure investments and policy measures,” noted Roopank Chaudhary, Partner and Rewards Consulting Leader at Aon. “Businesses are taking a strategic approach to compensation to ensure sustainable growth and workforce stability, even amid global uncertainty.”
The report, which analyzed data from over 1,060 organizations across 45 industries, underscores that while organizations remain cautious due to global headwinds, the strategic investment in key talent pools and the underlying strength of the Indian economy are keeping salary growth healthy.
