Average Indian Salary to See Minor Increase in 2015
DELHI – The average Indian salary in 2015 will be much the same as in 2014, according to two recently published reports on income trends in Asia. Towers Watson found that the average Indian wage will see a real increase of around 3.5 percent in its Salary Budget Planning Report, while Mercer’s All Industries Total Remuneration Survey predicts a similar hike of approximately 3.7 percent.
Towers Watson and Mercer’s published findings show that the overall average salary in India will rise by 10.8 percent and 11 percent respectively. However, inflation is projected to cut this increase in “real terms” to around 3.5 percent.
These reports are in keeping with recent wage trends in India. In 2014, Indian salaries increased overall by 10.6 percent, but inflation lowered the hike in real terms to just 2.7 percent. 2015 will therefore not see a drastic rise in Indian wages.
Compared to other Asian countries surveyed, India’s salary increase is relatively low. Although India’s overall increase is the third highest in the Asia-Pacific region after Pakistan and Vietnam, the comparative increase in salaries looks much better after accounting for inflation. In this case, China and Vietnam both have higher real wage increases than India with 5.2 percent and 4.1 percent respectively.
Salary Increases by Sector
Among the industries surveyed in Mercer’s report, the one with the highest projected salary increase is the medical life sciences sector, with a 12 percent projected rise for 2015. The pharmaceutical sector will also experience a relatively large wage increase, with Towers Watson’s predicting that there will be an 11.5 percent rise.
The lowest expected average salary increase is for the IT and shared services sectors, both of which have a 10 percent projected increase. This is despite companies in the survey saying that the technology, medical life sciences and IT sectors will all be hiring aggressively in 2015.
This combination of lower wage increases and higher hiring interests suggests that some companies may feel the quality of workers in these sectors isn’t high enough. They may also help explain why the hi-tech and shared services sectors have the highest attrition rate of any industry, with 15 percent and 14.6 percent respectively.
Another sector that will see relatively slow growth is the financial sector with a projected 10 percent increase. According to Sambhav Rakyan at Towers Watson, this could be because compensation at financial institutions has become a major concern for not only the Indian government, but other governments in Asia as well.
The joint findings of Towers Watson and Mercer’s surveys indicate that the pay rises should be well spread out across all levels of employees, from production workers to executive directors. However, companies which are forecast to give out lower than average salary hikes may use discretion by only rewarding high performers with pay increases.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email firstname.lastname@example.org or visit www.dezshira.com.
Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.
Establishing Your Sourcing Platform in India
In this issue of India Briefing, we highlight the advantages India possesses as a sourcing option and explore the choices available to foreign companies seeking to create a sourcing presence here. In addition, we examine the relevant procurement, procedural and tax duty concerns involved in sourcing from India, and conclude by investigating the importance of supplier due diligence – a process that, if not conducted correctly, can often prove the undoing of a sourcing venture.
Taking Advantage of India’s FDI Reforms
In this edition of India Briefing Magazine, we explore important amendments to India’s foreign investment policy and outline various options for business establishment, including the creation of wholly owned subsidiaries in sectors that permit 100 percent foreign direct investment. We additionally explore several taxes that apply to wholly owned subsidiary companies, and provide an outlook for what investors can expect to see in India this year.
Passage to India: Selling to India’s Consumer Market
In this issue of India Briefing Magazine, we outline the fundamentals of India’s import policies and procedures, as well as provide an introduction to the essentials of engaging in direct and indirect export, acquiring an Indian company, selling to the government and establishing a local presence in the form of a liaison office, branch office, or wholly owned subsidiary. We conclude by taking a closer look at the strategic potential of joint ventures and the advantages they can provide companies at all stages of market entry and expansion.
- Previous Article An Introduction to Sourcing from India, Part 1: India’s Sourcing Edge
- Next Article India’s Provident Fund Scheme to see Significant Change in 2015