Why MNCs Should Consider Tier 2 and Tier 3 Cities in India for Global Capability Centers (GCCs)
Amrutha V Kumar
India Entry - FDI / Setting up / Expansion + Strategic Investments / M&A | Trade & Investment Promotions | Internationalisation
India is a hub for Global Capability Centers (GCCs), with over 1,800 centers employing more than 1.3 million people. These hotspots are primarily located in cities that offer a conducive environment, robust infrastructure, access to talent, and a supportive ecosystem. Typically, when multinational corporations consider establishing a presence in India, they tend to focus on just five cities: Delhi, Mumbai, Pune, Bangalore, and Chennai. However, they often overlook the fact that these cities have already reached their capacity, and India has 28 states with approx 20+ cities being significant business hubs.
I was looking at GCC worth Tier 2 & 3 cities in India and look what I have found:
Tier 1 cities :
1. Hyderabad (150+ GCCs)
2. Jaipur (50+ GCCs)
3. Kolkata (40+ GCCs)
4. Ahmedabad (30+ GCCs)
5. Gurugram (200+ GCCs)
6. Noida (150+ GCCs)
Tier 2 cities (5-10 GCCs each):
1. Coimbatore
2. Thiruvananthapuram
3. Visakhapatnam
4. Chandigarh
5. Bhubaneswar
6. Nagpur
7. Lucknow
8. Kanpur
Tier 3 cities (1-5 GCCs each):
1. Mysuru
2. Mangaluru
3. Vijayawada
4. Rajkot
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5. Surat
6. Indore
7. Vadodara
8. Patna
It's time to shift the focus beyond the usual metropolitan hubs. Tier 2 and Tier 3 cities in India offer a wealth of opportunities for setting up Global Capability Centres (GCCs). Some high potential cities are listed below with their rationales:
Ahmedabad: Known for its strong industrial base and educational institutions.
Mysuru: Emerging as a key player in the IT sector and as an extension to Bengaluru.
Vadodara: Gaining attention for its engineering talent and cost-effective real estate.
Nashik: Known for its industrial growth and proximity to Mumbai.
Tirunelveli: Attracting GCCs due to its lower cost of living and skilled professionals.
Bhubaneswar: Rapidly developing with a focus on IT and education.
Coimbatore: Known for its entrepreneurial spirit and robust industrial base.
Madurai: Offers a growing talent pool and cost-effective operations.
Jaipur: Attractive for its lower real estate costs and improving infrastructure.
Indore: Known for its business-friendly environment and educational institutions.
Chandigarh: Offers a high quality of life and a growing IT sector.
Kochi: Emerging as a key IT and business hub with good connectivity.
GCCs in Tier 2 and 3 Indian cities can also provide a unique opportunity for young professionals to grow professionally while maintaining a better work-life balance and enjoying a more relaxed pace of life. This could have a significant impact on young professionals, allowing them to stay in their hometown and avoid the challenges of relocating to a crowded and expensive tech city.
Additionally, these smaller cities may offer a more affordable cost of living, providing a higher quality of life without breaking the bank. For at least a period of time, this could be an attractive option for young professionals seeking a more balanced and sustainable lifestyle.
Zoho's case study on setting up in a village is a fascinating example of how a company can thrive while promoting work-life balance and community development. Sridhar Vembu, Zoho's CEO and co-founder, envisioned a world where talented individuals don't have to leave their home towns to succeed. He believes that world-class products can be built anywhere, and this philosophy drives Zoho's rural revival efforts. Zoho plans to replicate this model in other villages across India and even globally, with locations in Mexico, the US, and Japan. This approach not only benefits the company but also contributes to the overall well-being of the communities they serve.
So, will you consider these cities? Share your thoughts!
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CEO | Entrepreneur | Technical Architect
2 天前I recently had the pleasure of speaking with a very talented young lady who had just graduated. She shared how she’s conducting research on robots, automation, and UV-C sanitizing equipment for hospitals and high-risk areas. What amazed me even more was that she hails from a small town, Theni, near Madurai in Tamil Nadu. Her ability to articulate the technology and her thought process, combined with the fact that she’s collaborating with a university in Coimbatore, participating in cutting-edge research, left me thoroughly impressed. If innovation and impactful work like this can stem from Theni, it solidifies my belief in the argument made in this post. The untapped potential of Tier 2 and Tier 3 cities is immense. It’s time we give these cities the attention they deserve and unlock a new wave of opportunities for professionals and organizations alike. The future is definitely not confined to metros!?
GCC/GCoEs - Build, Lean, Operate, Scale & Manage | GCC Consulting & Advisory | Program & Project Management| Lean Ops| Talent Management| Scalability Planning| |ex Zinnov/Draup/F&S
2 周Wonderfully articulated, Amrutha! The potential in Tier-2 cities is indeed immense and often underlooked. Since COVID, the wave of reverse migration has also boosted these regions' dynamism. Taking Coimbatore as an example, known for its traditional entrepreneurial spirit, but also its vibrant ecosystem comprising universities, startups, and allied local and national enterprises. These factors, along with strong government support for infrastructure, transform these locations into value hubs that go well beyond mere cost advantages. Furthermore, these cities are making significant strides to attract Gen Z talent, with a rise in urban lifestyle offerings such as cafes, pubs, sports arenas, and more, creating a lifestyle ecosystem that appeals to young professionals.
Co-founder & CTO of ICONFlyertech IT Systems, Chairperson India Finland Alumni Community, WICCI India EU Council member, WTM Ambassador
3 周Tier 2 and tier 3 cities are full of opportunities, thanks to companies like Zoho. This growth leads to more jobs for residents and affordable land for businesses. Moving to these areas also means less traffic and lower living costs for employees, making it a win-win for everyone.
Market Entry Specialist / CSR Impact Assessment / CSR Strategy / Business Strategy / Market Research / Competitive Intelligence
3 周The untapped potential in tier 2 and tier 3 cities presents a significant opportunity, and tapping into it can greatly contribute to our country's overall development. I think it is a great move.
CEO Silverspoon Consultancy AP & India | Board member at Carysil | Keynote speaker | Mentor NITI AAYOG WEP G20 | ESG advisory, certification, workshops AI,Data, Branding, Market Entry | ex Cisco, J&J, Haworth
3 周I was in Mangalore at Technovanza to discuss the same topic, and one of the key benefits is that it creates more job opportunities and alleviates pressure in larger cities.