In fiscal year 2025, salary hikes in India’s $250 billion IT services industry are expected to remain moderate, ranging from 4% to 8.5%, as firms face global economic challenges, evolving skill demands, and the impact of AI adoption. This cautious approach marks a shift from the more aggressive pay increases of previous years, with companies adopting conservative strategies due to reduced discretionary spending and changing business priorities. As a result, some companies are delaying appraisal cycles beyond the typical April-June period, creating further uncertainty around salary revisions.
IT Salary Hikes in 2025: Focus on Skills and Retention
Organizations are increasingly focusing on skills-based pay and leveraging Tier II hiring to enhance cost efficiency. Instead of traditional salary hikes, many companies are turning to retention bonuses, ESOPs, and project-based incentives. The days of double-digit pay increases appear to be over, with firms like TCS leading the way with salary hikes between 4% and 8% effective in April 2025. Other IT giants, such as Infosys, HCLTech, Wipro, and Tech Mahindra, are holding off on final announcements, likely awaiting Q2 market movements.
While salary growth appears modest, it aligns with broader market conditions. Aon, a global professional services firm, projects a 9.2% average salary increase across industries in India for 2025, slightly lower than the previous year. Geopolitical uncertainties and the rising role of AI in workforce transformations are key factors driving this cautious stance. Attrition rates in the IT sector have also cooled, allowing companies more financial flexibility.
IT Salary Hikes in 2025: Variations by Role, Skill Set, and Demand
Salary hikes are expected to vary depending on experience and skill sets. Freshers can expect moderate hikes of 2% to 4%, as companies focus on their competency and adaptability, especially in integrating AI. In contrast, mid-level professionals with specialized skills, particularly in AI and cybersecurity, may see increases of 10% to 12%. Senior-level employees with expertise in leadership or niche technical roles could receive hikes between 12% and 15%, reflecting their strategic value.
Certain IT roles, particularly in AI/ML, cybersecurity, and cloud engineering, are commanding above-average salary increases due to high demand and talent shortages. Additionally, the demand for roles in digital transformation and global capability centers is driving premium hikes. As salary hikes become more restrained, companies are offering non-monetary benefits like flexible work arrangements, healthcare, and wellness programs to retain talent. Despite the slowdown in salary increases, India’s IT sector remains a crucial contributor to the country’s GDP and continues to drive technological innovation and employment growth.
