India’s Salary Growth Map Is Changing—Tier-2 Cities Are Catching Up

India’s salary landscape is undergoing a significant shift, with several Tier-2 cities emerging as strong contenders alongside traditional metro hubs.

Advertisement

According to the TeamLease Jobs and Salaries Primer FY2026-27, salary growth is becoming more geographically balanced as manufacturing, industrial expansion, and enterprise investments gather pace across the country.

The report surveyed 1,268 businesses across 23 industries and 20 cities to assess salary increment trends for entry-level talent across sectors including IT, manufacturing, BFSI, healthcare, logistics, retail and education.

Chennai Leads Among Metros

Among India’s leading metropolitan cities, projected pay increments for FY2026-27 indicate steady compensation growth, with Chennai leading the rankings, followed closely by Pune, Hyderabad, Bengaluru, Mumbai and Delhi.

Advertisement

• Chennai: 9.7% (highest projected average salary increment)
• Pune: 9.6%
• Hyderabad: 9.6%
• Bengaluru: 9.4%
• Mumbai: 9.3%
• Delhi: 9.3%

These figures indicate that while established business centres continue to offer competitive compensation, the gap between metros and emerging cities is narrowing.

Tier-2 Cities Narrow the Gap

The report also highlights the rising pay competitiveness of Tier-2 cities, with several emerging locations matching or even outperforming some of India’s largest metropolitan job markets.

• Ahmedabad: 9.5%
• Visakhapatnam: 9.5%
• Nagpur: 9.4%
• Jaipur: 9.3%

Advertisement

The report attributes this trend to expanding industrial corridors, increased manufacturing investments and the decentralisation of business operations.

As companies establish new facilities and expand beyond traditional urban centres, demand for skilled professionals is rising across these emerging locations.

Also Read: Labour Codes Are Redefining Salary Structures: Compliance Is Not Just About 50% Basic Pay

Manufacturing Fuels Regional Salary Growth

Unlike previous years, when salary growth was largely driven by the technology sector, manufacturing is playing an increasingly important role in shaping compensation trends across India.

The expansion of industrial clusters, production facilities and supply chain operations is creating new employment opportunities outside the largest metros.

This is enabling cities such as Ahmedabad, Nagpur, Visakhapatnam and Jaipur to attract talent with competitive salary increases.

IT Hubs Continue to Dominate Technology Pay

While salary growth is becoming more widespread geographically, India’s technology hubs remain the strongest performers for IT professionals.

The report projects Bengaluru to lead IT salary increments with 12.7%, followed by Hyderabad at 11.7%, Chennai at 11.5% and Pune at 11.3%.

Continued expansion of Global Capability Centres (GCCs), digital transformation initiatives and sustained demand for technology talent are expected to support higher pay growth in these cities.

A More Distributed Salary Growth Story

The findings suggest that India’s employment and compensation landscape is becoming increasingly diversified.

Rather than being concentrated in a handful of metropolitan cities, salary growth is now spreading across emerging business centres driven by manufacturing, infrastructure development and enterprise expansion.

For employers, this creates opportunities to build talent pipelines beyond traditional hiring locations. For professionals, it signals that attractive career opportunities and competitive salary growth are no longer confined to India’s biggest metros.

Advertisement

Note: We are also on WhatsApp, LinkedIn, and YouTube to get the latest news updates. Subscribe to our Channels. WhatsApp– Click Here, YouTube – Click Here, and LinkedIn– Click Here.