India Inc likely to roll out 9.1% salary hike in 2026: Aon
India Inc. is expected to post 9.1% salary increases for 2026, according to a study by consulting firm Aon.
According to the firm’s 32nd Annual Salary Growth and Turnover Survey in India 2025-26, actual salary growth in 2025 reached 8.9%, below the projected 9.2%. The company surveyed more than 1,400 organizations across 45 industries.
Salary increases are expected to vary by sector; Real estate and infrastructure sectors as well as non-banking financial companies (NBFCs) are expected to deliver the highest salary growth in 2026. Automotive and vehicle manufacturing, engineering design services, engineering and manufacturing, and retail are also expected to offer slightly above-average wage increases.
“Resilient domestic demand, moderate inflation and new trade agreements are contributing to a positive outlook over the medium term, even as firms face geopolitical uncertainty,” said Roopank Chaudhary, partner and rewards consultancy leader at Aon’s Talent Solutions India.
“Strong wage growth in sectors such as real estate, NBFCs and manufacturing underscores employers’ intent to invest in critical talent while creating more sustainable compensation strategies,” Chaudhary added.
Wage increases have moderated steadily over the past decade. For example, according to Aon, India Inc. It achieved an average increase of 10.4% in 2015.
Impact of labor law
These quiet raises come at a time when India Inc. is grappling with the impact of labor law enforcement.
According to a Mint Third-quarter profits of 25 of India’s top 30 companies took a hit worth nearly Rs 12,000 crore, according to a report published in February. ₹12,000 crore hit to third quarter profits in FY2026. This is because labor law requires higher social security contributions from both employers and employees, as well as increasing retirement benefits.
The moderation in hikes comes amid challenges from tariff restructuring, global trade wars and the artificial intelligence boom that is displacing jobs in the IT sector. The resulting uncertainty pushed technology stocks to sell, further weakening corporate confidence.
EY’s Future of Salary 2026 report predicted that salaries in India are likely to increase by 9.1% in 2026. The report highlights financial services, e-commerce, life sciences and pharmaceuticals as the best-performing sectors, while engineering, manufacturing, automotive and infrastructure are expected to see more moderate increases. It also highlighted a growing shift towards skills-based pay, where artificial intelligence and digital talent deliver significant bonuses.
Amit Kumar Otwani, associate partner, Aon’s Talent Solutions India, said: “With India’s labor laws now notified, organizations are experiencing one of the most significant regulatory transitions in decades.”
“Standardized definition of wages and expanded social security provisions are prompting many employers to re-evaluate and restructure compensation. Clear communication about these changes will be critical to maintaining the confidence and stability of the workforce,” Otwani added.
