India's salary growth is expected to persist at 9.1% (2026-27) as companies keep investing in talent and are kept going to meet global economic uncertainty, geopolitical tensions and higher business costs.
According to the latest annual salary increase and turnover survey by professional services company Aon, Indian employers are expected to pay an average salary hike of 9.1% in 2027 compared to 9% in 2026. The results suggest that salary budgets are likely to remain fairly stable as companies balance employee retention, productivity and financial discipline.
The survey encompassed responses from more than 1,200 firms across 45 industries and covered issues of compensation planning and workforce trends in India. The findings suggest that employers still see the value of a skilled workforce as a big part of an uncertain economy in the world.
Aon says that non-banking financial companies (NBFCs), energy, real estate and infrastructure are likely to be the primary drivers of salary growth. Business confidence is high, with strong domestic consumption and investment and export growth, and companies are continuing to invest in employees while keeping operating costs under control.
Roopank Chaudhary, Partner and Rewards Consulting Leader at Aon’s Talent Solutions business in India, said: “The domestic economic growth and investment are helping organisations to keep their faith in the company even in the face of external risks.” The survey’s findings suggest that salary decisions are increasingly based on specific industries, business performance and demand for specific skills rather than the increase in every sector. Thus, workers in growing industries may receive different pay from those in smaller and budget-constrained sectors.
NBFC is expected to have the highest salary increases, and its role in financing and lending in the Indian economy is undeniable. Energy companies are also expected to raise competitive wages, and real estate and infrastructure companies will continue to invest in the people to do the projects and grow.
Specialised skills are required for these industries, including financial analysis, engineering, project management, operations and technical skills. However, the expected average increase does not mean that every employee will receive a 9.1% pay increase. The actual increments can vary depending on the employer, job role, performance rating, experience, location and financial position of the organisation. Promotions, bonuses and changes in responsibilities can also affect what an individual's overall compensation package is.
The survey also indicates changing employee-retention trends. Employee attrition was up to 18% in 2026 from 16.2% in 2025 (Aon report), and it shows there is a renewed movement in the workforce despite relatively stable salary budgets. Employee attrition is the process by which people leave an organisation.
A further increase will increase the pressure on companies to retain experienced workers, fill the gap and keep the company running. It’s possible for employers to respond through salary hikes, performance-based awards, job opportunities, training and better workplace policies.
But pay is only one factor that makes an employee stay with a company. Career advancement, work-life balance, leadership, job security and the availability of meaningful responsibilities can also affect retention. The increase in attrition is indicative of the continued problem for employers to balance the cost of wages with the need to keep skilled professionals.
Uncertainty about global growth is also an important factor for salary planning. Businesses must make sense of changing trade dynamics in the world, geopolitical risks, inflation pressures and the cost of adopting new technology. At the same time, companies are also competing for workers who can support digital transformation, particularly those who can help with specialised operations and productivity upgrades.
So companies are asking for a more targeted approach to compensation in terms of job opportunities and workers for critical roles and skills that are hard to find. That’s why the number of figures of pay growth in the headline wage growth is a more subjective figure, but for employees as an overall market projection and not a target for a guaranteed rise in personal income.
Workers who are considering a job change can have a look at industry demand, the skills to do their jobs and the total package provided by prospective employers. At the same time, employers must make sure that the salary they’re paying is for longer-term business sustainability and employee engagement.
Overall, the 9.1% salary hike for 2027 will be in line with the compensation picture in India, but employers will need to keep pay growing and be mindful of costs. The survey shows that wages are still being supported by domestic economic growth and business investment, even in the face of talent shortages globally and uncertainty.
NBFCs, energy, real estate and infrastructure will be the sectors to watch, and the results of each will be dependent on company performance and employee-specific factors. For job-seekers and current workers, the findings are a measure of the general hiring and compensation trends but should not be taken as a promise of a specific raise. In the planning process for salaries for the coming year in India, as businesses are in the process of preparing for the 2027 calendar year, the balance between paying employees, retaining talent and generating profits is going to be at the core of salary decisions.
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