With corporates facing shortage of talent, India is likely witness over 14 per cent increase in salaries annually for the next three years even as there has been a sharp rise in input costs, a latest study says.

India, Vietnam and Indonesia are the only three countries in the Asia-Pacific region which are likely to see a double-digit increase in salaries until 2011, as per a report, soon to be released in India, by global human resource consulting firm Mercer.

"For India, although we forecast a slight downward trend, the country can still expect one of the highest pay increases in Asia-Pacific at more than 14 per cent up to 2011," the Asia-Pacific Compensation report by Mercer stated.

Across Asia-Pacific countries, salary increases in 2008 are expected to be higher than in 2007, with an easing expected in 2009, despite the slowing of most economies and weaker global scenario, the report forecast.

"In India the salary increases are expected to be in double-digit for the next few years as companies are facing shortage of talent. This need for quality people is likely to boost the increase in salaries," Mercer India business leader for information product solutions Gangapriya Chakraverti told PTI.

Besides, in China wages are forecast to rise until 2009 and then ease gradually but still remain above nine per cent.

Asked about the situation of wage rise in the IT sector, which is under pressure from the global slowdown Chakraverti said, the salary hikes in the sector would continue and companies may employ different methods like focus on greater productivity and efficiency to control the tightening of margins.

The hi-tech industry is showing signs of moderation in the high salary hikes offered in the past. Salary increases in 2008 are expected to be slightly lower than in 2007 in China, Indonesia, South Korea and Thailand.

"This marks a change in trend direction as well, with salary increases in the hi-tech industry in the Asia Pacific region beginning to drop after 2008 up to 2011," the report added.

Though India and Vietnam would continue to witness double-digit pay hikes in this industry, Hong Kong is expected to experience stable salary rise in 2009 and a mild drop thereafter, it added.

In terms of sectors, the financial services industry is likely to see the highest growth in salary increase despite of many MNCs facing the brunt of the sub-prime crises in the US, Chakraverti said.

Real Estate and infrastructure are also likely to witnesses aggressive increases in wages in the coming few years.

But, manufacturing and engineering sector may experience a slowdown in salaries increases due to sharp impact of rise in input costs, Chakraverti added.

Besides, salary rise is expected to move in a narrow band up to 2010 in India and China's Pharmaceutical sector. It could see a fall thereafter.

While the drop for India is not drastic, China is expecting a decline in pharma industry's growth rates post 2010 and this is expected to drive salary increases down in that period, the report added.