India Inc may witness 9% salary rise in 2026: Report

New Delhi: India Inc is projected to post 9% salary growth in 2026, with auto and high tech (product and consulting) leading the trend, according to global HR consulting firm, Mercer India.

Salary increases this year were largely in the high single-digit range, aligned with a moderating economic environment.

From a global perspective, India continues to stand out as one of the fastest-growing salary markets, significantly outpacing developed economies, such as the US, UK, Europe and Japan, where salary growth typically ranges between 2% and 4%, Malathi KS, Mercer’s Rewards Consulting Leader India, told TOI.

According to Mercer’s annual Total Remuneration Survey 2026, organisations are continuing to refine their rewards packages, with a focus on short-term incentives, moving toward more transparent, skills acquisition and deployment-based systems. Short-term incentives like bonuses have led to a stronger emphasis on near-term performance alignment, cost efficiency, and building transparent, skills-based pay frameworks to support evolving workforce needs in the face of AI and productivity priorities, it said.

Further, the IT, ITES, and global capability centers (GCC) sector in India continues to lead the way in offering innovative and progressive employee benefits reflecting the sector’s commitment to enhancing employee well-being and engagement.

The survey covers remuneration trends across 8,000 roles and in over 1,500 companies in the country.

Despite a tougher economic outlook, the key factors influencing salary increases in 2026 remain unchanged, with individual performance, an employee’s position within the salary range, inflation and an organisation’s competitiveness in the job market continuing to drive pay decisions, it noted.