The Great Tech Compensation Divergence: Decoding India’s 40% Pay Drop Amidst US Record Highs 

The global tech sector is experiencing a dramatic divergence, as a recent report reveals Indian tech professionals faced a steep 40% pay drop in 2025, with median salaries falling to $22,000, while US counterparts saw a 23% rise to record highs of $150,000.

This chasm is driven by a surplus of entry-level talent and severe funding constraints in India compressing wages, contrasted with a sustained war for specialized, senior expertise in the US. Amid this downturn, India’s tech sector shows a silver lining with near gender pay parity, but the broader story signals a market correction and a strategic global shift towards equity-based compensation, pushing professionals everywhere to prioritize specialization and ownership stakes over traditional salary alone.

The Great Tech Compensation Divergence: Decoding India’s 40% Pay Drop Amidst US Record Highs 

The global technology sector, long perceived as a unified engine of growth and prosperity, is showing deep fissures. A startling new report from Deel and Carta reveals a tale of two tech economies: in the United States, median salaries for engineering and data roles have surged 23% to a record $150,000. Meanwhile, in India, a country synonymous with tech talent, professionals in identical roles have seen their median compensation plummet by 40% to just $22,000. 

This isn’t just a statistical blip; it’s a seismic shift that signals a fundamental restructuring of the global tech labor market. What forces are driving this great divergence, and what does it mean for the millions of tech professionals at its heart? 

Beyond the Headlines: Unpacking the Numbers 

At first glance, the figures are jarring. A drop from $36,000 to $22,000 in a single year for Indian tech roles is unprecedented. However, to understand this, we must look beyond the median and into the market dynamics. 

The $22,000 median (approximately ₹18 lakhs INR) reflects a massive influx of entry-level and junior talent. India produces over 1.5 million engineering graduates annually. This vast supply, coupled with a global slowdown in tech funding, has shifted power decisively to employers. Starting salaries have been compressed, and the “average” has been dragged down significantly. 

In the US, the opposite is true. The median salary of $150,000 underscores a relentless war for experienced, specialized talent. While mass layoffs at major tech giants made headlines, they largely targeted non-technical roles and newer hires. The demand for senior engineers, AI/ML specialists, and cybersecurity experts remains intensely competitive, forcing companies to offer premium packages to secure top-tier candidates. 

The Underlying Forces: Why the Chasm is Widening 

Several interconnected factors are creating this stark contrast. 

1. The Funding Winter and Its Uneven Impact: The end of the near-zero interest rate era has dried up the venture capital that fueled the global tech boom. US-based startups, while affected, often have deeper funding runways and access to more resilient late-stage capital. Indian startups, particularly in growth phases, have been hit harder, leading to stringent cost-cutting measures where payroll is the largest target. Salary corrections and hiring freezes have become the norm.
2. The Globalization of Talent vs. The Localization of Cost: The remote work revolution taught US companies that they can tap into global talent pools. Previously, this meant paying a premium by local standards to attract the best in India. Today, it increasingly means hiring competent talent at a fraction of the US cost. For a US firm, $22,000 is a bargain; for the Indian job market, it’s a depressing new benchmark for mid-level roles.
3. The Specialization Premium: The report hints at a crucial detail: the rise of equity-based pay for top technical talent worldwide. The story isn’t that all Indian tech salaries are collapsing; it’s that the market is bifurcating. There is a growing chasm between replaceable coders and true innovators. Professionals with niche skills in AI, quantum computing, or advanced data science can still command high salaries and significant equity, both in India and the US. The decline is steepest for those in more generalized roles where the talent supply is abundant.

A Silver Lining: India’s Surprising Stride Towards Gender Pay Parity 

Amid the gloomy compensation data, the report highlights a remarkable achievement: India is nearing gender pay parity in its tech sector. The report states that India “shows near parity in tech roles, with sales achieving full gender equality.” 

In sales, both men and women earned a median of $12,000. While the absolute number is low, the equality is significant. This contrasts sharply with the widest gender pay gaps found in developed nations like Canada, France, and the US. 

This progress can be attributed to several India-specific factors: 

• Corporate Diversity Mandates: Many IT services giants and tech MNCs in India have robust, enforced diversity and inclusion policies. 

• Meritocratic Onboarding: Heavy reliance on standardized coding tests and academic scores in recruitment can help reduce initial bias. 

• A Cultural Shift: A new generation of women in STEM is entering the workforce, supported by changing societal norms and a strong desire for financial independence. 

However, the work is not complete. Gaps persist in product and design ($23,000 for men vs. $18,000 for women) and data roles ($18,000 for men vs. $13,000 for women), indicating that as roles become more strategic and subjective, old biases can creep in. 

The Equity Equation: The New Frontier of Compensation 

The most telling insight for the future is the global shift towards equity-based compensation. Carta’s data shows that median equity grants for engineers have risen steadily since 2021, with emerging markets like Brazil and India recording the fastest growth. 

This is a game-changer. It means that for ambitious Indian tech professionals, the path to wealth creation may no longer be through a high monthly salary, but through owning a piece of the company. 

What this means in practice: 

• For Top Talent: The most skilled professionals are increasingly negotiating packages heavy on stock options (ESOPs), betting on the long-term success of a startup rather than immediate cash. 

• For Companies: It’s a strategy to attract and retain mission-critical talent without burning through scarce cash reserves. 

• For the Ecosystem: It fosters a more mature, risk-and-reward culture, similar to Silicon Valley. If an Indian startup has a massive exit, it could create a new generation of angel investors and founders who understand the value of equity. 

Navigating the New Reality: A Guide for Tech Professionals 

For individuals navigating this new landscape, the strategy must evolve. 

In India: 

• Specialize or Become Obsolete: Move beyond generic software development. Deepen expertise in high-demand areas like AI/ML, DevOps, cybersecurity, or cloud architecture. 

• Think Like an Owner: When evaluating job offers, give serious consideration to equity packages. Ask about the company’s valuation, the percentage of ownership being offered, and the exit potential. 

• Build a Global Profile: The remote work world is your oyster. Use platforms to build a portfolio that appeals to international clients and companies willing to pay for quality, not just location. 

Globally (including the US): 

• Negotiate the Whole Package: Don’t fixate solely on base salary. Understand the value of your equity, benefits, and other non-monetary perks. 

• Continuous Learning is Non-Negotiable: The tech landscape shifts rapidly. The skills that got you a high salary today may be commoditized tomorrow. 

The Road Ahead: A More Nuanced, More Globalized Future 

The headline “40% pay drop” is a painful reality for many in the Indian tech sector, reflecting a necessary and painful market correction after a period of hyper-growth. However, it also marks a maturation. 

The era where simply being a tech professional guaranteed a rising salary is over. The future belongs to the specialized, the adaptable, and those who think like partners rather than employees. The rise of equity and the impressive strides in gender parity are signs of a market growing up, not just breaking down. 

The great tech compensation divergence is more than a salary gap; it’s a powerful reminder that in a truly globalized economy, talent is universal, but opportunity and reward are being recalibrated in real-time. The professionals and companies that understand this new calculus will be the ones who thrive in the next chapter of the tech revolution.