Indian employees are set for another year of healthy salary growth in FY2026-27, with pay hikes expected to range between 8.6% and 10.2% across sectors, according to TeamLease Services’ Jobs and Salaries Primer FY2026-27 released on Tuesday. Employees in fast-expanding sectors such as EV infrastructure, fintech, healthcare and engineering-related functions are likely to emerge as the biggest beneficiaries of the upcoming appraisal cycle.

The report, based on responses from 1,268 companies across 23 industries and 20 cities, indicates that India’s evolving economic landscape is increasingly rewarding specialised skills and execution-driven roles. High-growth sectors including EV and EV infrastructure, fintech, healthcare and pharmaceuticals, and power and energy are projected to witness the strongest salary growth, with increments ranging between 9.6% and 10.2%.

Among job profiles, electrical engineers are expected to command the steepest salary hikes at 11.2%, followed by quality control inspectors at 10.9%, project engineers at 10.7%, IT support executives at 10.3%, and quality assurance engineers and site engineers at 10.2% each.

“India’s salary landscape in FY2026-27 is becoming increasingly differentiated and execution-led,” said Balasubramanian A, senior vice president at TeamLease Services. “Increment trends are now being shaped more decisively by sector-specific growth momentum and the demand for specialised talent.”

Sectors categorised as sustainable-growth industries — including automotive, retail, insurance and BPO — are likely to offer salary increases in the range of 8.9% to 9.5%. Within these industries, project engineers are projected to receive hikes of 10.7%, while EHS officers, IT support executives and relationship executives may see increments of around 10.1%.

Meanwhile, relatively mature sectors such as banking, construction and real estate, telecommunications and textiles are expected to witness more moderate salary growth of 8.6% to 8.8%. Even within these segments, select high-demand roles continue to attract premium increments, including site engineers at 9.8%, tele callers at 9.7%, and financial reconciliation analysts and IT support executives at 9.5% each.

However, TeamLease cautioned that prolonged geopolitical tensions, inflationary pressures and elevated input costs could weigh on salary growth during the FY2026-27 appraisal cycle. Companies may turn more conservative in their compensation planning if economic uncertainties persist over the coming months.

“If geopolitical tensions, inflationary pressures and higher input costs continue, they could impact business performance and cost planning for the FY27 cycle,” Balasubramanian said. “In such an environment, organisations may adopt a more cautious stance on salary budgets while continuing to prioritise critical talent and top-performing employees.”

He added that even if headline salary increments remain stable, persistently high inflation could dilute real income gains by eroding employees’ purchasing power.

Across functions, demand remains strongest for talent in sales and marketing, engineering and information technology. Relationship executives in NBFCs are projected to receive salary hikes of 10.1%, while marketing executives, automotive showroom sales professionals and FMCG area sales managers are likely to see increments of around 10%.

The report also highlighted rising wage growth among blue-collar workers, reflecting increasing demand for skilled operational talent. EV charger installation technicians are expected to receive salary hikes of 10.3%, while field service technicians and logistics loaders or unloaders may see increments of 9.6% and 9.5%, respectively. Service technicians in the consumer durables sector are projected to receive salary increases of 9.4%.

Among cities, Chennai is expected to lead salary growth with projected increments of 9.7%, followed by Pune and Hyderabad at 9.6% each, and Ahmedabad at 9.5%. Emerging business centres such as Visakhapatnam at 9.5% and Nagpur at 9.4% are also gaining prominence, while Surat, Chandigarh and Lucknow are projected to record slower salary growth compared with last year.

“Compensation growth is no longer concentrated only in traditional metro markets,” Balasubramanian said. “Emerging cities are steadily strengthening their role in India’s talent economy, supported by industrial expansion, rising enterprise investments and evolving business ecosystems.”

The report further pointed to widening compensation disparities between permanent and temporary employees. Manufacturing, engineering and infrastructure recorded the highest pay variance at 11.4%, followed by insurance at 9.9%, banking at 9.8%, and healthcare and pharmaceuticals at 9.3%. In contrast, sectors such as IT at 4.9%, fintech at 4.8%, power and energy at 4.3%, and travel and hospitality at 4.2% displayed relatively stable compensation structures.