India 2026 Salary Hike Projections
Analysis based on 7 articles · First reported Feb 23, 2026 · Last updated Feb 24, 2026
The report from EY indicates a normalization of salary budgets and a shift towards skill-based compensation in India, which could lead to more predictable labor costs for companies and potentially higher retention of skilled talent. This trend, coupled with moderating attrition, suggests a more stable workforce environment, which is generally positive for the broader market.
EY's 'Future of Pay' report for 2026 projects an average salary hike of 9.1% across India Inc, a slight decrease from 9.3% in 2025, reflecting sustained cost discipline and normalization of salary budgets. Global Capability Centers (GCCs) are expected to lead with 10.4% increments, followed by Financial Services, E-Commerce, and Lifesciences and Pharmaceuticals. The report highlights a significant shift towards skill-based pay frameworks, with emerging tech roles commanding up to a 40% skill premium. Attrition rates are stabilizing, declining to 16.4% in 2025 from 17.5% in 2024, with Financial Services experiencing the highest attrition. Executive compensation, particularly for CEOs in NIFTY 50 companies, is projected to reach ₹7–9 crore in 2025, with a substantial portion linked to long-term incentives. India's new Labour Codes are also prompting organizations to reassess wage structures and statutory obligations.
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