Salaries In India Expected To Rise 9.1% In 2027 Amid Global Uncertainty: Report

Salaries in India are expected to rise by 9.1 per cent in 2027 as employers maintain stable compensation budgets while balancing growth ambitions, rising workforce costs and intensifying competition for skilled talent, a report said on Wednesday.

The projection, based on global professional services firm Aon's Annual Salary Increase and Turnover Survey for India 2026-27, is broadly unchanged from 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 the country's largest compensation studies.

According to the report, strong domestic consumption, sustained investments and export growth continue to support business confidence, enabling companies to invest in talent while maintaining cost discipline.

Sector-wise, non-banking financial companies (NBFCs) are expected to lead salary growth in 2027 with projected increments of 10.1 per cent. The energy sector is likely to witness salary hikes of 9.9 per cent, followed by real estate and infrastructure at 9.8 per cent.

Roopank Chaudhary, Partner and Rewards Consulting Leader for Talent Solutions India at Aon, said employers are increasingly adopting a targeted approach to compensation.

"Strong domestic consumption, sustained investment and export growth continue to support business confidence, allowing employers to invest in talent while maintaining cost discipline," said Chaudhary.

"Stable salary budgets are enabling a more targeted approach to pay. A modest rise in non-merit adjustments, particularly in manufacturing and technology, reflects greater focus on market alignment, scarce skills and critical talent. Employers are increasingly focused not only on how much they spend, but where that investment can deliver the greatest workforce and business value," he stated.

The report also highlighted growing challenges in talent retention. Overall attrition increased to 18 per cent in 2026 from 16.2 per cent in 2025 and 17.1 per cent in 2024.

At the same time, companies are rapidly integrating artificial intelligence into their operations. Established adoption of AI productivity tools rose to 56 per cent in 2026 from 46.1 per cent a year earlier, with usage expanding across all major job categories covered in the survey.

Amit Kumar Otwani, Associate Partner, Talent Solutions India at Aon, said compliance alone would not be sufficient and employers must assess the broader workforce and cost implications of the Wage Code while ensuring effective communication with employees.

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