Here are my two cents:
First question: After switching a job (of 2-3 years), what is the percentage salary hike average among the Indian IT companies?
This depends on the situation. How desperately is the company looking to hire someone? Do they need the candidate yesterday, today or tomorrow? Are they in a hurry to hire ASAP? If yes, then you can crack a deal of your choice - 30%, 40%, 50%, 60%, 70% - all these are just numbers if they feel you are the right candidate for the job, Further, if you can join within the given time frame then you can ask for as good as 100% hike because in this scenario the hiring company is desperate to hire the right candidate.
If the hiring company is not desperate or if they are hiring in bulk/ for the bench then they will give you all the time in the world to join, that is three months in India, and you will get somewhere around 30% or 40% hike based on your experience, skill and your ability to negotiate.
Second Question: How much of a salary hike should one ask for?
In my opinion, here is the most important tip on this subject.
Let us imagine your salary is Rs 4 Lakh per annum.
Now ask yourself: “how much do you think you deserve?”
If your answer is 6 Lakh per annum. Ask yourself one more question.
“What is the amount which you feel is totally absurd? or Do you feel that the employer will be ready to pay 7 Lakh per annum for this job?”
If you think 7 Lakh is not absurd then ask again “What is the amount which you feel is totally Irrational? or Do you feel that the employer will be ready to pay 8 Lakh per annum?”
Continue this process till you reach a point when you reach an amount which you feel is absurd or an amount which you think you do not deserve or an amount which you think the employer will never pay for this job. Ask for this irrational amount as your expected salary.
This is how you break your own limitations because everything is in your mind.
I know people who used to earn 3.5 Lakh per annum, To begin with, they thought going from 3 Lakh to 6 Lakh was impossible. But guess what! They got offers as good as 8 Lakh per annum and in some cases 11 Lakh per annum.
Of course, your skill, your expertise and experience are key factors which determine your power position when you sit on the negotiating table, however, I have seen a lot of people under-rate themselves and settle down for an amount which is way too less than what the employer would have offered; just because they did not dare to ask beyond their imagination of self-worth.