Salary increases in India may be stabilising, but not all employees will benefit from it equally. Some industries are experiencing high growth, while others are exercising caution, so it is important to understand where your industry stands. According to the latest report of Deloitte India Talent Outlook 2026, the average salary increase in 2026 is expected to be 9.1%. This is slightly more than 9.0% in 2025, which shows a more balanced and thoughtful approach towards salary planning.
In the strong economic environment, companies are looking for ways to retain their employees as well as keep expenses under control. The result of this is that more care is being taken in the matter of salary. The growth is happening only within a limited range and more attention is being paid to wise investment in work productivity and skills. Anandorup Ghosh, partner, Deloitte India, said that in the last few years, most of the companies have started keeping the salary increase within a fixed limit every year. Decisions regarding talent and rewards have changed, as most skills are currently in less demand for jobs than for workers. Now more emphasis is being laid on increasing work capacity and using the expenditure on skills in the right direction.
Which sectors are giving the highest salary hike in 2026?
The report shows that not all sectors are the same in terms of salary increase. Pharma and Life Sciences sector is at the forefront, where salaries are increasing by about 10%. Manufacturing and financial services sectors are also seeing greater growth due to growth and recruitment demand. A slightly better increase in salaries is expected in the consumer sector. On the contrary, the technology sector is taking precautions. Both product and services companies are reducing growth estimates by 10-70 basis points compared to last year. Even though overall salary increases have remained stagnant, companies are becoming more selective in giving rewards based on work performance.
The share of employees getting top ratings has decreased from 10% in 2024 to 7% in 2025. Now about 16% of employees fall in the lowest two categories of performance. This points to a steeper performance bell curve, where top performers and key role players are rewarded more. Despite the decrease in the number of top performers, promotions are increasing. Interestingly, despite the decline in top ratings, promotions are increasing. Promotion rates increased from 12% in 2024 to 14% in 2025, with a higher increase seen in manufacturing and operations-based companies. The special thing is that this is almost double the share of top-rated employees. This trend shows that companies are rewarding not only current work, but also future potential and preparedness. However, companies need to balance this approach carefully to avoid unnecessary expansion of positions and titles in the long run.
Attrition rate stabilized as recruitment slowed down
The employee attrition rate will increase from 17.4 percent in 2024 to 17.6 percent in 2025, but this increase does not reflect any major jump in recruitment, as some of it is also related to the increase in the number of people leaving the job under compulsion. Companies are not increasing wages by much in response, which indicates that the job market has now stabilized. The availability of talent has also improved, with more people coming from tier-2 and tier-3 cities and campus recruitment has also strengthened.
Companies are increasingly adopting a skills-based approach to recruitment and development, and competency frameworks have become common. Nearly three-quarters of companies report that they have a framework of both behavioral and technical skills, which are increasingly being integrated into job evaluation, learning processes and career development.
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