As of October 2023, this appears to be the date of your training data. In 2025, there has been a marked slowdown in the overall trends in salary hikes in India as pay growth declined further down to 8.8 percent from previous years. This is reflective of the changing economic scenario, transitions on the sectoral front, and uncertainties globally that have had a bearing on salary increments in various industry sectors.
Factors For The Decline
There are several reasons for this decline in salary growth:
- Economic Slowdown: India still boasts a lot of growth, but with inflation, fears of a global economic recession, and diminished consumer buying, it is still faced with headwinds. These have brought forth a cautious approach from companies regarding salary hikes.
- Industry Specific Trends: The downturn in funding and cost-cutting measures has hit certain industries: IT and startups. At the same time, healthcare, manufacturing, and essential services have remained consistent and are not hiking salaries aggressively.
- Hybrid Work Impact: Cost Rationalization: The shift toward hybrid and remote working forced many companies to rationalize costs, and some chose to keep wage costs in check to remain profitable.
- Global Market Influence: The interlinked global economy means a recession in the West translates to a downward trend in salary structures in India, especially true for sectors dependent on outsourcing and exports.
Sector-Wise Salary Hike Trends
Even with an overall decline, some sectors continue to reward their employees with competitive pay hike-increments.
- IT & Tech: The sector had freezing double-digit hikes before but has now come down to percent average between 7 and 9.
- Banking & Financial Services: Salary increments in this industry are about 9 percent on account of steady market performance.
- Healthcare & Pharma: Healthcare remains in the category of resilient industries, applying salary increases of about 8 percent to 10 percent.
- Retail & E-Commerce: The compensations are still growing, at a rate of about 7 percent, despite fluctuating demand.
What This Means For Employees
Employees facing an issue with lower salary hikes should consider developing skills, performance-linked incentives, and upskilling to remain relevant to the labor market. Better negotiations on benefits, looking for better leadership opportunities within the organization, and being keen on high-growth sectors to cushion slower pay growth are the calls.
Conclusion
The salary hike trends in India in 2025 foreshadow a possibly cautious view on pay growth marked by the decline of increments to 8.8 percent. While selected industries are still offering competitive raises, economic hurdles and global factors have lent an even more cautious tone to the outlook. The face of all this is for the employee to adapt through skill development and strategizing on career growth.
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