Possibility of salary increase in Indian industry
According to the “Deloitte India Talent Outlook 2026” report released by Deloitte on Monday, the average salary growth across Indian industries is expected to remain largely stable at 9.1 per cent in 2026, marginally higher than the 9 per cent growth recorded in 2025.
The survey, conducted between January and February 2026, collected responses from organizations across seven regions and 27 sub-sectors in India, primarily from chief HR officers and senior HR leaders.
The report also recorded changes in performance ratings within companies. The share of employees receiving the highest rating on the five-point performance scale is expected to decline to 7 percent in 2025, from 10 percent in 2024. “At the same time, approximately 16 percent of the workforce now falls into the bottom two performance ratings, reflecting a more rigorous calibration of performance outcomes,” the report said.
However, promotion rates increased during the year. The proportion of promoted employees is expected to increase to 14 per cent in 2025 compared to 12 per cent in 2024, with higher levels seen in manufacturing and operations-intensive organisations.
According to the report, the attrition rate increased slightly to 17.6 percent in 2025, from 17.4 percent in 2024.
Anandorup Ghosh, partner, human capital consulting, Deloitte India, said, “Over the last few years most organizations have come to operate within a narrow band of salary increases every year. Decisions on talent and rewards have changed as employees and companies are operating in a buyer’s market across most skill categories. There is a far greater focus on increasing productivity and ensuring effective and directed skills spend.”
Salary hike budgets in India have largely settled in a narrow range in recent years following the volatility seen during the pandemic recovery period, when companies increased salaries more rapidly amid strong hiring demand and talent shortage. Surveys by consulting firms have shown that annual wage growth in various sectors is gradually stagnating.
Sector-wise projections for 2026 show variations in the level of growth compared to actual figures for 2025. The pharmaceuticals sector is projected to register wage growth of about 10.1 per cent in 2026, up from 9.8 per cent in 2025, while the broader life sciences sector is expected to see a growth of about 9.9 per cent, up from 9.7 per cent.
Manufacturing companies are projected to offer average growth of about 9.8 percent in 2026, compared to 9.6 percent in 2025. Within the sector, automotive original equipment manufacturers are expected to deliver growth of around 10.3 per cent compared with 10.1 per cent last year, while power and renewable energy companies are projected to offer around 10.4 per cent from 10.3 per cent. Semiconductor firms are expected to register growth of about 10.1 percent in 2025, up from 9.6 percent.
In financial services, the overall projected wage growth in 2026 is 9.1 percent, compared to 8.9 percent in 2025. Within the sector, non-banking financial companies are expected to offer growth of around 9.5 per cent compared to 9.1 per cent last year, while asset management companies are projected to post growth of around 9.4 per cent, up from 9.2 per cent.
In the technology sector, IT products companies are projected to deliver growth of around 9.2 per cent in 2026, compared to 9.3 per cent in 2025, while IT services firms are expected to register a growth of around 6.9 per cent, down from 7.6 per cent last year. Global capacity centers are projected to offer 8.8 percent growth from 9 percent in 2025.
The slowdown in wage growth in parts of the technology sector comes amid a broader slowdown in hiring after the rapid expansion seen during the pandemic years. Layoffs at many global and Indian tech firms from 2023 onwards and the increased use of artificial intelligence tools have also begun to reshape workforce demand, with companies focusing on specialized skills while controlling overall hiring.
The report also noted changes in performance rating distribution within organizations. The share of employees receiving the highest rating – “significantly exceeds expectations” – fell to 7 per cent in 2025-26 from 10 per cent a year earlier. The share of employees with an “exceeds expectations” rating also declined marginally from 23 percent to 22 percent, while the share of employees with a “meets expectations” rating increased from 53 percent to 55 percent.
At the low end of the scale, the share of employees with “below expectations” ratings increased from 10 percent to 11 percent, while the share of employees with “significantly below expectations” ratings increased from 4 percent to 5 percent.
The attrition rate across Indian industry increased slightly to 17.6 percent in 2025 compared to 17.4 percent in 2024. Sector-wise data shows variation in workforce movement. The decline in financial services widened to 28.6 per cent in 2025 from 26.4 per cent a year ago, while manufacturing widened to 12.2 per cent from 10.6 per cent and life sciences to 15.3 per cent from 13.3 per cent.
