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The automotive industry is projected to offer an average salary hike of 10.1 per cent for the financial year 2025–26 (FY26), The Economic Times reported, citing Deloitte’s ‘Performance and Rewards Trends Study’ for automotive producers. This projection is notably higher than the average 8 per cent salary growth seen across other Indian sectors.
Some firms concluded their appraisals for FY26 in March 2025, while others are expected to finalise them after June, depending on their financial year-end.
EVs, automation, AI roles driving demand for skilled talent
Human resource heads at Hyundai Motor India Ltd (HMIL) and Skoda Auto Volkswagen India Pvt Ltd attributed the double-digit hikes to increased demand for roles in electric vehicles, research and development, product engineering, automation, artificial intelligence (AI), and machine learning.
Top-performing employees are likely to receive raises exceeding the 10 per cent mark, according to the report.
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Double-digit raises continue for fifth straight year
Neelesh Gupta, partner at Deloitte India, noted that FY26 would mark the fifth consecutive year of double-digit pay hikes for the automotive sector. However, he added that the rate of increase has been gradually declining over the past three years.
Compared to last year’s 10.5 per cent hike, this year’s projected 10.1 per cent still places the automotive sector ahead of India Inc’s overall average of 8.8 per cent for FY25.
Automobile exports up 19% in FY25
India’s automobile exports rose by 19 per cent to over 5.3 million units in FY25, compared to 4.5 million in FY24. Passenger vehicle exports rose by 15 per cent to 770,364 units in FY25, up from 672,105 the previous year, according to industry body SIAM.
The segment delivered its best-ever annual performance, driven by global demand for India-manufactured models.
IT sector braces for modest salary hikes
In contrast, India’s IT services sector is likely to witness more modest salary hikes, amid global economic uncertainties and a shift in skill requirements.
Average pay increases are projected to range between 4 and 8.5 per cent—lower than in previous years—indicating a move towards more sustainable compensation structures in the face of growing AI adoption and cost optimisation.
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