Salary increases across India are expected to remain stable in 2027, with companies projected to offer an average increment of 9.1%, according to a new compensation survey by global professional services firm Aon. The forecast suggests that employers are continuing to invest in their workforce despite global economic uncertainty, increasing operating expenses and competition for skilled professionals. The projected increase is slightly higher than the average salary hike of 9% recorded in 2026. The findings indicate that Indian businesses are attempting to balance employee expectations, talent retention and long-term growth while keeping compensation budgets under control. The latest India salary hike 2027 projection comes from Aon's Annual Salary Increase and Turnover Survey for India 2026-27. The study analysed information from more than 1,200 organisations operating across 45 industries, providing a broad view of salary planning, employee turnover and changing workforce priorities. For employees, the findings offer an indication of the salary increases companies may consider in the coming year. However, the actual increment received by an individual will depend on several factors, including industry, job responsibilities, performance, experience, specialised skills and the employer's compensation policy.

Why Are Salaries in India Expected to Rise in 2027?

According to the survey, domestic consumption, continued investment and export growth are helping maintain business confidence. These factors are supporting companies as they plan future expansion and decide how much to allocate to employee compensation. Strong domestic demand can encourage businesses to increase production, expand services and recruit additional workers. At the same time, investment in infrastructure, technology and other commercial activities can increase the need for employees with specialised knowledge and practical experience. Exports also contribute to business activity by connecting Indian companies with international markets. When businesses expect demand to remain healthy, they may be more willing to allocate funds for recruitment, employee development and salary adjustments. Nevertheless, employers are not increasing pay without considering costs. Companies must account for operating expenses, changing market conditions and the financial impact of maintaining a competitive workforce.

Which Sectors Could Offer the Highest Salary Hikes?

The survey indicates that salary increases may differ considerably between industries. Non-banking financial companies are expected to record the highest average increment among the sectors highlighted in the report, followed by energy, real estate and infrastructure. The projected sector-wise salary increases for 2027 are as follows:

1. Non-Banking Financial Companies: 10.1%

NBFCs are expected to lead salary growth with projected increments of 10.1%. These companies provide financial services such as lending and credit to individuals and businesses. The projected increase places the sector above the overall national salary forecast of 9.1%. For employees working in lending, financial operations, risk management and other specialised functions, compensation decisions will continue to depend on individual roles and company performance.

2. Energy Sector: 9.9%

The energy industry is expected to offer average salary increases of 9.9%. The sector includes a wide range of activities, from conventional energy operations to newer energy-related businesses. Companies require employees with technical knowledge, operational experience and specialised expertise. The projected salary increase reflects the compensation outlook for the sector as reported by Aon, although actual increments may vary between employers and job categories.

3. Real Estate and Infrastructure: 9.8%

Real estate and infrastructure companies are projected to provide salary hikes of 9.8%. These industries employ professionals across project management, engineering, construction, finance, sales and operations. Compensation decisions can vary depending on project requirements, business activity and the skills needed to deliver projects efficiently. The sector's projected increment is also higher than the overall 9.1% salary growth forecast for India in 2027. These figures represent sector-level projections rather than guaranteed increments for every employee. The survey information provided does not establish that every company within these industries will offer the same increase.

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Salary Hike 2027: What Employees Should Expect

For employees, the projected national average of 9.1% provides a useful reference point for understanding the wider compensation environment. It does not mean that every worker will receive a 9.1% raise. Individual increments can differ based on annual performance, promotion, company profitability, market demand for a particular skill and the employee's position within the organisation's existing salary structure. Some employees may receive higher increases when they move into specialised roles or take on additional responsibilities. Others may receive smaller adjustments if their employers face financial pressure or have limited room in their salary budgets. Employees considering a job change should also distinguish between an annual increment and an increase in total compensation resulting from a new role. Basic pay, allowances, bonuses, retirement contributions and other benefits can affect the overall value of a compensation package. The projected figures therefore provide a broad market indicator, not a personal salary calculator. Workers should assess their own responsibilities, performance and prevailing pay levels before using the national forecast to set salary expectations.

Companies Are Focusing More on Critical Skills

Aon Partner and Rewards Consulting Leader for Talent Solutions India, Roopank Chaudhary, said that stable salary budgets are allowing employers to take a more targeted approach to compensation. According to Chaudhary, companies are paying greater attention to market alignment, hard-to-find skills and employees whose contributions are important to business outcomes. The report also noted a modest rise in non-merit salary adjustments, particularly in manufacturing and technology. Non-merit adjustments are salary changes that are not based solely on an employee's individual performance rating. Depending on the employer's policy, such adjustments may be used to address market pay differences, internal salary structures or the need to retain employees with specialised expertise. This approach indicates a shift in how organisations distribute compensation budgets. Instead of treating every role equally, employers are increasingly considering where salary investment can help them compete for talent and support business priorities.

Employee Attrition Rises to 18% in India

Alongside salary planning, the survey highlighted a rise in employee turnover. Overall attrition increased to 18% in 2026, compared with 16.2% in 2025 and 17.1% in 2024. The figures suggest that retaining employees remains a challenge for organisations, even as salary budgets remain relatively stable. Attrition refers to employees leaving an organisation during a particular period. Depending on the circumstances, departures may result from resignations, retirement or other reasons. A high attrition rate can increase recruitment expenses, create staffing gaps and require companies to spend more time training replacement workers. For employers, the challenge is not limited to offering higher salaries. Career progression, management practices, workplace conditions, learning opportunities and job security can also influence an employee's decision to stay. Companies may therefore need to combine competitive pay with better career development and a clearer understanding of employee expectations. 

AI Adoption in Indian Workplaces Continues to Expand

Artificial intelligence is becoming another major consideration in workforce planning. Aon reported that established adoption of AI productivity tools rose to 56% in 2026, up from 46.1% a year earlier. The survey found that the use of these tools was expanding across all major job categories covered in the study. This points to a wider role for AI in everyday business activities, rather than its use being limited to technology departments. Businesses can use AI productivity tools for tasks such as preparing and organising information, assisting with research, supporting data analysis and improving routine workflows. The precise applications depend on the tools being used and the nature of each job. As adoption expands, employers may need to reassess the skills required for different positions. Employees who can combine professional knowledge with effective use of digital tools may become increasingly valuable in workplaces undergoing technological change. However, the survey's adoption figure does not mean that AI has replaced 56% of workers or that every organisation uses AI in the same way.

Wage Code Compliance Adds to Employers' Responsibilities

The report also highlighted the importance of preparing for the wider workforce and cost implications of India's Wage Code. Amit Kumar Otwani, Associate Partner at Talent Solutions India, Aon, said that employers should look beyond basic compliance and assess how wage-related requirements may affect their workforce costs. He also emphasised the importance of communicating changes effectively to employees. For companies, changes in wage structures can require careful review of compensation policies, payroll processes and employee benefits. Organisations must understand the applicable legal requirements and assess how they affect their existing salary arrangements. Clear communication is equally important. Employees need to understand how changes to pay structures or employment policies affect their compensation. Employers, meanwhile, need to plan for potential costs without losing sight of recruitment, retention and business objectives. The survey's discussion of wage-related compliance reinforces the broader challenge facing businesses: salary planning is no longer just about deciding the percentage of an annual raise. It also involves legal compliance, workforce planning, cost management and the changing skills needed across the organisation.

What the 2027 Salary Forecast Means for India's Job Market

The expected 9.1% average salary increase suggests that compensation growth in India may remain relatively steady in 2027, even as employers respond to global uncertainty. The sector-wise projections show that salary increases are unlikely to be uniform. NBFCs, energy, real estate and infrastructure are expected to remain above the national forecast in the survey's estimates, while the final outcome for an individual employee will depend on the employer and role. At the same time, rising attrition means companies must consider how to retain experienced workers, while expanding AI adoption is changing the skills and productivity expectations associated with many jobs.