Salary Growth in India Set to Edge Higher in 2026
Salaries in India are projected to rise by 9.1 per cent in 2026, slightly higher than the 8.9 per cent growth recorded in 2025, according to a report released on Tuesday by Aon plc. The findings point to a steady compensation outlook as organizations recalibrate talent strategies amid regulatory and market shifts.The report indicates that salary increases will vary across industries, with certain sectors expected to outpace the national average.
Real Estate, Infrastructure and NBFCs to See Strongest Salary Hikes
The real estate or infrastructure sector is projected to offer the highest salary growth at 10.2 per cent, followed closely by non banking financial companies at 10.1 per cent. These sectors are expected to lead compensation trends in 2026.Retail employees are forecast to see average salary increases of 9.5 per cent, while life sciences firms are projected to implement hikes of 9.4 per cent. Global capability centres are expected to record increments of 9.3 per cent, and funds and asset management firms are likely to offer 8.5 per cent increases.
Other sectors such as automotive and vehicle manufacturing, engineering design services, engineering and manufacturing, and retail are projected to provide slightly higher than average salary hikes.
Technology Consulting and Services Lags Behind
Technology consulting and services is estimated to register the slowest salary growth at 6.6 per cent, according to the report. The comparatively modest increment reflects sector specific adjustments in compensation strategies.Attrition Declines as Hiring Stabilizes
The study, which covered more than 1,400 organizations across 45 industries, found that overall attrition declined to 16.2 per cent in 2025. This marks a drop from 17.7 per cent in 2024 and 18.7 per cent in 2023, signaling improving employee retention across industries.The report noted that this normalization reflects more targeted hiring practices and a stronger focus on employee engagement, career mobility and workplace stability.
Companies Focus on Upskilling and Workforce Resilience
With a more stable and engaged workforce, organizations are increasingly prioritizing technology, engineering and customer facing capabilities. The healthier talent environment is expected to enable companies to invest in targeted upskilling and build resilient talent pipelines to support long term growth.Labour Code Transition Prompts Compensation Review
Amit Kumar Otwani, Associate Partner, Talent Solutions, India, at Aon plc, said that with India’s labour codes now notified, organizations are navigating a major regulatory transition.He stated that the standardized definition of wages and expanded social security provisions are prompting many employers to reassess and restructure compensation frameworks. Clear communication around these changes will be critical in maintaining workforce trust and stability.
The report suggests that as regulatory clarity improves and workforce stability strengthens, Indian companies are positioning themselves for sustained talent development and long term growth in 2026.
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