India to see lowest salary increase in a decade, says survey
ADVERTISEMENT
Reflecting a slowdown in the economy, Indian companies will offer a 9.1% increase in salaries to their employees in 2020, a 20-basis point fall from last year and the lowest in a decade. However, two of the five participating companies in the survey projected a double-digit increase in salaries and expected a positive economic outlook.
E-commerce and early-stage companies, and professional service providers will see the highest salary increase of 10%, while transportation and logistics firms will pay the lowest increments at 7.6%, according to the latest Aon Salary Increase Survey. More than 1,000 organisations across 20 industries participated in the survey.
In 2019, companies in India gave a slightly higher average pay increase of 9.3%.
July 2025
In the world’s youngest nation—where over 65% of the population is under 35—India’s future is already being shaped by those bold enough to lead it. From boardrooms to breakout ideas, a new generation of business leaders is rewriting the rules. This year's Fortune India’s 40 Under 40 celebrates these changemakers—icons in the making like Akash Ambani, Kaviya Kalanithi Maran, Shashwat Goenka, Parth Jindal, Aman Mehta, and Devansh Jain—who are not just carrying forward legacies but boldly reimagining them for a new era. Alongside them are first-generation disruptors like Sagar Daryani, scaling Wow! Momo with a vision to take ₹100 momos to 5,000 cities, and Palak Shah, turning the Banarasi weave into a global fashion story with Ekaya Banaras. These are the entrepreneurs turning ambition into scale. And even beyond traditional industry, the entrepreneurial wave is pulling in creative forces—Ranveer Singh, for instance, is shaking up wellness and nutrition with Bold Care and SuperYou, proving that passion, backed by purpose, is the new blueprint for building brands.
“Despite economic challenges in 2019, organisations in India are taking a positive view. Pay increases in India continue to be the highest in the region. A big reason for India’s higher salary increase compared to other growing economies is the high inflation rate and the war for key talent and niche skills,” said Tzeitel Fernandes, Partner, Rewards Solutions, Aon, a professional services firm.
The auto sector, which is in the doldrums with falling sales for over a year now, will see the biggest drop to 8.3% average salary increase from 10.1% in 2018, according to the survey.
“We see a reduction in the differences between pay increases across industries, with 85% of the organisations projecting a hike between 7% and 11%—a sign of maturing business ecosystems. However, the premium for high performance and new-age skills continues to rise,” said Navneet Rattan, director, organisation, performance and rewards, Aon India.
The survey says pay increase budgets in 2020 are likely to be the lowest in a decade, but Indian organisations have still settled on a high single-digit salary increase, with 39% of the organisations projecting a double-digit increase. The average increase is also the highest among the Asia-Pacific countries.
Almost half of the organisations surveyed are projecting a salary increase in the range of 8%-10%, with junior management continuing to receive a higher salary increase compared to senior management, the survey added.
There has also been a marginal increase in attrition rate to 16.1% in 2019 from 15.8% in the previous year. Pay risk increased to 16.1% in 2019, up from 15.2% from a year ago.
Fortune India is now on WhatsApp! Get the latest updates from the world of business and economy delivered straight to your phone. Subscribe now.