India salary hike 2027: Salaries to rise 9.1%, but which sector will see the biggest pay increase?

New Delhi: Salaries in India are projected to increase by an average of 9.1 per cent in 2027, as employers maintain stable pay budgets amid global uncertainty, rising workforce costs and growing competition for skilled talent, according to a report released on Wednesday.

The projection is based on the Annual Salary Increase and Turnover Survey for India 2026-27 by global professional services firm Aon. The expected rise is marginally higher than the actual average salary increase of 9 per cent recorded in 2026.

The survey analysed data from more than 1,200 organisations across 45 industries, making it one of India's largest compensation studies.

The report attributed the relatively stable salary outlook to strong domestic consumption, sustained investment and export growth, which continue to support business confidence. These factors are allowing companies to invest in talent while maintaining control over costs.

NBFCs likely to lead salary growth

Non-banking financial companies (NBFCs) are expected to record the highest salary increases in 2027, at 10.1 per cent. The energy sector is projected to follow with increments of 9.9 per cent, while real estate and infrastructure are expected to see salary hikes of 9.8 per cent.

Roopank Chaudhary, Partner and Rewards Consulting Leader for Talent Solutions India at Aon, said employers were increasingly taking a targeted approach to compensation rather than relying solely on overall salary budget increases.

“Stable salary budgets are enabling a more targeted approach to pay,” Chaudhary said, adding that a modest increase in non-merit adjustments, particularly in manufacturing and technology, reflected a greater focus on market alignment, scarce skills and critical talent.

Employers are now paying closer attention to where compensation spending can deliver the greatest value to their workforce and businesses, he said.

Employee attrition rises to 18%

The report also pointed to growing challenges in retaining employees. Overall attrition in India rose to 18 per cent in 2026, compared with 16.2 per cent in 2025 and 17.1 per cent in 2024.

Meanwhile, the adoption of artificial intelligence (AI) productivity tools continued to accelerate across organisations. Established adoption rose to 56 per cent in 2026, up from 46.1 per cent in the previous year, with usage expanding across all major job categories covered by the survey.

Amit Kumar Otwani, Associate Partner, Talent Solutions India at Aon, highlighted the need for employers to look beyond compliance when implementing the Wage Code.

He said organisations must assess its wider implications for workforce management and costs while ensuring effective communication with employees.

The findings suggest that Indian employers are seeking to balance competitive pay, talent retention and the growing adoption of AI while keeping compensation budgets largely stable.