Salaries in India are projected to rise 9.1% in 2026, reflecting sustained employer confidence and steady economic momentum, according to a study by Aon. The modest uptick from 2025’s 8.9% hike points to continued competition for skilled talent across key sectors.
Aon, a leading global professional services firm, revealed that while the salary momentum remains steady, pay growth is increasingly uneven across sectors.
Real estate, infrastructure and non-banking financial companies (NBFCs) are expected to post the highest hikes, followed by automotive manufacturing, engineering design, industrial manufacturing and retail. These trends, Aon notes, reflect employers’ ongoing push to strengthen technology, engineering and customer-facing roles in a market where specialised talent continues to command a premium.
What do execs at Aon say?
“India is entering the next phase of its growth story on a stronger macro foundation,” said Roopank Chaudhary, partner and rewards consulting leader, Talent Solutions, India, at Aon.
“Resilient domestic demand, moderating inflation and new trade agreements are contributing to a positive medium-term outlook, even as firms navigate geopolitical uncertainty. Stronger salary growth in sectors such as real estate, NBFCs and manufacturing underscores employers’ intent to invest in critical talent while building more sustainable compensation strategies,” the report notes.
The survey also highlights a continued cooling of attrition. Employee turnover dropped to 16.2% in 2025, down from 17.7% in 2024 and 18.7% in 2023, bringing churn rates close to pre-pandemic levels.
Focus on selective hiring
Aon attributes this steady decline to more selective hiring, improved engagement and greater internal mobility, which together are helping organisations build more stable and resilient teams.
“With a steadier workforce and a healthier talent environment, companies can now focus on targeted upskilling and long-term capability building,” the report noted. “That shift is essential for sustaining productivity and future growth.”
Meanwhile, India’s recently notified labour codes are reshaping compensation structures. “The standardised definition of wages and expanded social security provisions are prompting many employers to reassess pay design,” said Amit Kumar Otwani, associate partner, Talent Solutions, India, at Aon. “Clear communication around these changes will be critical to maintaining workforce trust and stability.”
With robust domestic fundamentals, declining attrition and sustained pay momentum, Aon’s report suggests that 2026 could see India’s job market enter a more stable—but more skills-intensive—phase of growth.
In its 32nd edition, the study is among the country’s most detailed compensation analyses, drawing insights from over 1,400 organisations across 45 industries.