Once a beacon of technological advancement and opportunity, India’s tech sector is now witnessing a significant downturn in compensation. A recent joint report by the payroll and compliance platform Deel and equity management firm Carta reveals a stark 40% plunge in median salaries for engineering and data roles in India, dropping from $36,000 to $22,000 in just one year (2025).
This contrasts sharply with the trajectory in the United States, where tech professionals are experiencing a golden era. US engineers and data scientists have seen their salaries surge by an impressive 23%, reaching unprecedented highs. This remarkable growth is largely attributed to an AI-driven economy, which is compelling American tech companies to offer premium compensation to attract and retain highly sought-after talent.
The report highlights a widening gap between these two major tech markets. What began as a global remote hiring boom during the pandemic, leading to dollar-linked pay scales in India, has now corrected. Emerging markets, including India, are facing a period of cost rationalization and hiring freezes, which are significantly stifling salary growth. Meanwhile, in the US, the fierce competition for experts in critical areas like AI, cloud computing, and cybersecurity continues to push wages upward, defying broader economic uncertainties.
India’s Tech Sector: A Shift from Growth to Correction
The data from the report paints a concerning picture for India’s tech workforce. Professionals in engineering and data roles, previously celebrated as symbols of the nation’s IT success, are now navigating a challenging period of global recalibration. Deel and Carta’s analysis underscores a dramatic 40% drop in median compensation for these roles within a single year – a steep decline rarely observed in India’s historically buoyant digital economy.
Industry experts pinpoint several factors contributing to this decline. These include a reduction in global remote work contracts, the reintroduction of in-office mandates by Western companies, and significant corrections in startup valuations. The latter has particularly impacted equity-linked pay components, which were once a major draw. This shift reflects a move from the expansive, exuberant hiring witnessed in 2021–22 to a more cautious, pragmatic scaling approach in 2024–25.
US Market: AI Fuels Unprecedented Talent Demand
Across the Atlantic, the narrative is markedly different. The same Deel and Carta report indicates that median compensation for US-based tech professionals soared by 23% in 2025. This surge is a direct result of intensifying competition for specialized talent. As artificial intelligence fundamentally reshapes various industries, companies are aggressively recruiting engineers skilled in developing large language models, designing robust data architectures, and deploying machine learning solutions. This intense demand has ignited a bidding war, particularly in leading tech hubs like San Francisco, Austin, and New York, driving up wages significantly.
This rise in US compensation presents a paradox: while automation might displace certain jobs, it simultaneously dramatically increases the value and remuneration for highly specialized roles essential to the evolving AI landscape.
Gender Pay Parity: India’s Unsung Achievement
Amidst these fluctuating compensation trends, India has quietly made a commendable stride in gender equality within its tech sector. The Deel–Carta report highlights that India has achieved near gender pay parity in tech roles. Furthermore, the sales sector within the country has reached full gender equality, a remarkable achievement that many Western economies are still striving to attain.
The Future of Tech Work: A Divergent Global Landscape
The growing divergence in tech salary trends between India and the US is more than just an economic indicator; it signifies a fundamental reshaping of the global work landscape. For India, this short-term pay decline could paradoxically foster long-term resilience. It may encourage companies to move towards more sustainable, performance-linked compensation models, reducing reliance on previously inflated global parity wages. In the US, while escalating wages fuel innovation, they also bring increased cost pressures to an already expensive labor market.
As the global economy navigates this period of realignment, one truth becomes abundantly clear: the human capital driving the digital economy is no longer advancing in lockstep. The compensation packages for coders, designers, and data scientists are becoming crucial fault lines in a world grappling with how to balance technological ambition with economic accessibility.