Aon has announced that salary increments in India are expected to stabilise in 2025 according to the firm’s Annual Salary Increase and Turnover Survey 2024-25 India. The study, now in its 30th year and one of the largest and most comprehensive rewards studies in India, analysed data from over 1,400 companies across 45 industries.
The study shows that salaries in India are set to rise by 9.2 percent in 2025, a slight decline from the increase of 9.3 percent in 2024, amidst global uncertainty and softening growth. This indicates a trend of declining salary increments since 2022 when companies provided 10.6 percent salary increases influenced by the Great Resignation.
Salary increments are also projected to vary across industries with engineering design services and auto/vehicle manufacturing budgeting for the highest salary increases followed by nonbanking financial companies, retail, global capability centres and life sciences.
In 2024, the overall salary increase in India was 9.3%, with a slight dip projected to 9.2% in 2025. Engineering Design Services saw a 10.1% increase in 2024, expected to rise to 10.2% in 2025. The Automotive and Vehicle Manufacturing sector experienced a 10.7% increase in 2024 but is projected to moderate to 10.2% in 2025. Nonbanking Financial Companies saw a 10.1% rise in 2024, slightly declining to 10.0% in 2025.
The Retail sector recorded a 9.6% increase in 2024, projected to rise to 9.8% in 2025. Global Capability Centres saw a 9.4% increase in 2024, expected to grow to 9.7% in 2025. Engineering and Manufacturing remained stable at 9.7% in both 2024 and 2025. The Real Estate and Infrastructure sector saw a 10.6% increase in 2024, which is projected to drop to 9.7% in 2025.
Life Sciences experienced a 9.5% increase in 2024, maintaining the same rate in 2025. Professional Services saw an 8.9% increase in 2024, projected to rise to 9.5% in 2025. The Technology Platform and Products sector had a 9.5% increase in 2024, slightly decreasing to 9.4% in 2025. Ecommerce saw a 9.1% increase in 2024, expected to rise to 9.3% in 2025.
The Chemicals sector recorded an 8.6% increase in 2024, projected to rise to 9.2% in 2025. The Fast-Moving Consumer Goods (FMCG) and Fast-Moving Consumer Durables (FMCD) sector saw a 9.3% increase in 2024, slightly declining to 9.1% in 2025. The Services sector experienced an 8.8% increase in 2024, projected to rise to 8.9% in 2025.
Banking recorded a 9.1% increase in 2024, expected to decline to 8.8% in 2025. Technology Consulting and Services had the lowest increase, at 7.6% in 2024, with a projected change of 7.7 % for 2025.
“Despite external uncertainties, India’s economic prospects remain stable, with rural demand improving and private consumption maintaining momentum. The downward trend in projected salary increases could be in response to external factors like the geopolitical and economic developments, the potential impact of U.S. trade policies, conflict in the Middle East and the explosive pace of generative AI advancements,” said Roopank Chaudhary, partner and rewards consulting leader for Talent Solutions for India at Aon, “Our data shows that moderation in salaries is an expected outcome given the margin pressures on companies. The sector-wise increment trends for 2025 reflect prudence and adaptability as companies balance market challenges and the need to attract and retain talent across sectors.”
The study also reveals that overall attrition rates declined to 17.7 percent in 2024 from a high of 18.7 percent in 2023 and 21.4 percent in 2022, indicating the availability of a larger talent pool post the Great Resignation. This stability in talent availability is an outcome of increased labour force participation despite a rise in self-employment and entrepreneurial activity, which presents an opportune time for companies to focus on strategic workforce skilling, reskilling and institutional support.
“In a globally interconnected world, shifting governments, businesses and workforce behaviours and expectations could impact the Indian economy and subsequently the local talent landscape. A comprehensive analysis of market behaviours, robust datasets and advanced technology are essential to anticipate shifts and prepare accordingly,” said Amit Kumar Otwani, associate partner for Talent Solutions for India at Aon. “Adopting a hands-on approach to total rewards and compensation practices and leveraging AI-driven innovation will enable India Inc to achieve sustainable growth in an increasingly automated environment.”