India salary growth projected at 9.1% for 2027 as domestic economy stays resilient

Salaries across corporate India are projected to increase by an average of 9.1 per cent in 2026-27, sustained by robust domestic economic activity and steady capital investment even as global markets contend with trade risks and geopolitical friction.

The findings, published on Wednesday in professional services firm Aon's Annual Salary Increase and Turnover Survey for India 2026-27, draw on compensation data from more than 1,200 organisations across 45 industries. The numbers show Indian employers maintaining disciplined compensation budgets while directing the highest increments toward capital-intensive and core development sectors.

Which sectors are leading salary growth

Non-banking financial companies (NBFCs) are set to offer the highest compensation increases at 10.1 per cent, closely followed by energy at 9.9 per cent, and real estate and infrastructure at 9.8 per cent. The heavy weighting toward credit delivery, energy capacity, and nation-building infrastructure reflects sustained capital expenditure across core economic sectors.

"Strong domestic consumption, sustained investment and export growth continue to support business confidence, allowing employers to invest in talent while maintaining cost discipline," said Roopank Chaudhary, Partner and Rewards Consulting Leader for Talent Solutions at Aon India. Chaudhary noted that companies are focusing pay rises on scarce skill sets and critical positions to extract maximum value from their workforces.

Attrition and the competition for critical skills

Even with predictable compensation planning, competition for qualified staff remains vigorous. Overall voluntary and involuntary attrition across Indian industry climbed to 18 per cent in 2026, marking a rebound from 16.2 per cent in 2025 and 17.1 per cent in 2024. The movement indicates that employers are aggressively hiring from rival firms to secure specialized technical capability.

At the same time, workplace technology is shifting rapidly. The proportion of firms reporting established adoption of artificial intelligence productivity tools jumped to 56 per cent, up from 46.1 per cent in 2025, with usage expanding across every tracked occupational cluster. Around 60 per cent of surveyed organisations are funding structured upskilling programmes, alongside growing outlays on agentic AI workflows.

To secure top-tier technical staff, employers are paying a premium of roughly 10 per cent above standard compensation for roles in artificial intelligence, machine learning, and data science compared with 2025 levels.

Chaudhary observed that corporate deployment of AI has moved beyond experimentation into full enterprise rollout, meaning firms that establish clear performance metrics and align their payroll incentives with higher-value capabilities will achieve the strongest productivity gains.

Progress on Wage Code compliance

The survey also evaluated how companies are adapting to regulatory changes under the labour framework. A clear majority of employers—65.4 per cent—reported full compliance with the Wage Code, while another 20.9 per cent indicated they plan to complete compliance requirements within six months. About 42.8 per cent of businesses anticipate that these structural adjustments will raise their payroll costs by at least 1 per cent.

Aon Associate Partner Amit Kumar Otwani said the pace of Wage Code readiness was encouraging, adding that businesses must continue assessing their long-term cost structures and communicating changes clearly to employees while competing for top talent.