India's Salary Projections for 2025: 9.4% Increase Driven by Demand for Skilled Talent

India's salaries projected to rise by 9.4% in 2025, says Mercer surveyA new survey by Mercer predicts Indian salaries will increase by an average of 9.4% in 2025. This rise reflects the country’s economic growth and high demand for skilled workers.

Over 1,550 companies across various sectors, including technology, life sciences, and manufacturing, participated in the survey.

The automotive sector is expected to see the highest salary growth at 10%, fueled by electric vehicle production and government initiatives. Manufacturing and engineering salaries are projected to increase by 9.7%.The survey also revealed that 37% of companies plan to hire more employees in 2025. Employee turnover is predicted to stabilize at 11.9%, with agriculture, chemicals, and shared services experiencing the highest rates. Some companies plan to focus on competitive salaries, training, and employee engagement to retain workers.

Mansee Singhal, Mercer’s India Careers Leader, said, “India’s talent landscape is experiencing a remarkable transformation. Pay premiums are also reshaping the workforce, additionally, the increased adoption of performance-linked pay plans by more than 75% of organizations, signify a holistic shift towards performance orientation, both in the short term and long term. Companies that prioritize these trends will be better positioned to attract and retain talent in a competitive market.”The survey also found that 55% of Indian companies are using artificial intelligence (AI) in their operations. Business leaders believe AI will be a major driver of growth in the coming years.

Malathi KS, Mercer’s Rewards Consulting Leader for cross industry, India, added, “The Total Remuneration Survey highlights the strategic shifts organizations are making to attract and retain top talent. From adopting AI-driven solutions for personalized rewards to redefining the Employee Value Proposition with flexibility and wellness at its core, businesses in India are prioritizing value-driven approaches. These trends reflect a transformative era for the workforce, positioning India as a talent hub.”