- Salary increments in India’s IT sector are expected to be between 4-8.5% in FY25.
- Economic uncertainties and AI-driven automation are influencing pay decisions.
- Companies are focusing on cost optimization, upskilling, and workforce restructuring.
The Indian IT industry, a ₹250 billion sector, is preparing for subdued salary increments in FY25 as companies respond to economic headwinds and evolving skill demands.
Companies are prioritizing upskilling and reskilling initiatives to align their talent pool with emerging technologies like AI, cloud computing, and cybersecurity.
Cautious Salary Growth in India’s IT Industry as AI Reshapes Workforce
The IT sector in India, a key driver of the country’s digital economy, is witnessing a shift in compensation strategies as companies balance growth with financial prudence. Wage hikes, once a defining feature of the industry, are expected to moderate due to macroeconomic uncertainties and evolving business priorities.
Artificial intelligence and automation are playing a pivotal role in reshaping job roles, reducing the need for traditional IT services while increasing demand for high-tech capabilities. As a result, salary hikes are becoming more role-specific, with professionals in AI, cloud computing, and cybersecurity seeing better increments than those in legacy IT roles.
Cost optimization remains a key focus area for IT firms, with many adopting conservative pay structures to sustain profitability. The industry’s move toward efficiency-driven compensation is also tied to a decline in discretionary IT spending by global clients, further limiting budget allocations for salary increases.
While overall increments may be lower than in past years, top talent retention remains a priority. Companies are exploring alternative incentives, such as skill-based bonuses, flexible work policies, and stock options, to attract and retain skilled professionals in a competitive talent landscape.
As India’s IT sector navigates economic headwinds and AI-driven changes, salary hikes are becoming more strategic rather than widespread. Companies that invest in upskilling and talent optimization will be better positioned to sustain growth in the evolving digital economy.
“The future belongs to those who learn more skills and combine them in creative ways.” – Robert Greene
