Salaries in India are projected to grow by 9% in 2026, according to Aon plc’s latest Annual Salary Increase and Turnover Survey 2025–26 India. Now in its 31st year, the study draws insights from over 1,060 companies across 45 industries, making it one of the most comprehensive compensation analyses in the country.

The projected increase marks a slight uptick from the 8.9% actual growth recorded in 2025, underscoring the resilience of India’s economy despite global headwinds. Robust domestic consumption, sustained investments, and supportive policy measures continue to anchor growth.

Among industries, real estate/infrastructure and NBFCs are expected to register the highest salary hikes, while sectors such as automotive, engineering design, retail, and life sciences are also likely to maintain above-average increments — reflecting sustained investment in critical talent pools.

Industry Highlights

Salary increases are projected to vary across industries, with real estate/infrastructure and nonbanking financial companies (NBFCs) seeing the highest increases in 2026. 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.

“India’s growth story remains strong, supported by infrastructure investments and policy measures,” said Roopank Chaudhary, partner and rewards consulting leader, Talent Solutions for India at Aon. “Our survey shows that key sectors like real estate and NBFCs are leading the way in talent investment and businesses are taking a strategic approach to compensation to ensure sustainable growth and workforce stability, even amid global uncertainty.”

The study shows that overall attrition rates have declined to 17.1 percent in 2025, down from 17.7 percent in 2024 and 18.7 percent in 2023. This gradual decline points to a more stable talent landscape, with organisations experiencing improved employee retention. As the workforce becomes more settled, companies are well-positioned to invest in targeted upskilling and development programs, ensuring they can build a resilient talent pipeline and prepare for future business needs.

“Recent tax reforms are transforming India’s business landscape by incentivising demand and enabling domestic consumption, especially for consumer goods and automotive sectors,” said Amit Kumar Otwani, associate partner, Talent Solutions for India at Aon. “Simpler compliance and rationalised tax rates are boosting efficiency. Companies that align their rewards strategies with these changes will be best positioned to attract top talent.”