Global Capability Centers (GCCs) are no longer restricted to big cities like Bangalore, Mumbai, and Hyderabad. Companies are now expanding into Tier-2 cities such as Indore, Coimbatore, Jaipur, and Bhubaneswar. The push toward these cities is driven by lower operational costs, a skilled workforce, and strong government incentives.

Setting up in a Tier-2 city comes with several advantages. These locations offer a growing IT ecosystem, less competition for talent, and better work-life balance for employees. Many of these cities already have major IT parks, SEZs, and a pipeline of graduates from top engineering and management institutions.

With the right mix of infrastructure, talent availability, and cost benefits, several Tier-2 cities in India are becoming ideal locations for GCC expansion. This guide breaks down the best options and what makes them stand out.

City Best For Key Advantages
Indore IT, BPO, Software Services Strong talent pool, cost-effective, good infrastructure
Coimbatore IT, Manufacturing, Finance Established IT parks, skilled workforce, low operational costs
Bhubaneswar IT, Engineering Services Growing IT sector, government incentives, business-friendly policies
Jaipur IT, BPO, E-commerce Proximity to Delhi, IT SEZ, strong talent base
Ahmedabad Fintech, IT, Finance GIFT City, robust infrastructure, strong business environment
Mysuru IT, Outsourcing, R&D Affordable, strong IT presence, good quality of life
Vadodara Engineering, IT Services Close to Ahmedabad, low business costs, growing IT sector

Top 7 Tier-2 Cities for GCC Setup

As Global Capability Centers (GCCs) expand beyond Tier-1 cities, several Tier-2 cities in India are emerging as promising destinations. These cities offer a combination of lower costs, strong infrastructure, availability of skilled talent, and business-friendly policies that make them attractive for companies looking to set up or expand operations.

Here’s a detailed look at seven Tier-2 cities that stand out as strong contenders for GCCs.

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1. Indore (Madhya Pradesh) – Central India’s Rising IT Hub

Indore is rapidly transforming into a major IT and business hub in Central India. Traditionally known for its trade and manufacturing industries, the city has now gained prominence in technology, software development, and business process outsourcing (BPO).

Why Indore for GCCs?

  • IT and Business Growth: Presence of major IT companies like TCS, Infosys, and Impetus has put Indore on the map for tech and GCC expansion.
  • Educational Hub: Indore is home to top institutions like IIM Indore, IIT Indore, and DAVV, ensuring a steady supply of skilled professionals.
  • Cost Advantage: Compared to Tier-1 cities, real estate and salary costs are significantly lower, making it a cost-effective choice.
  • Infrastructure: Well-connected by road, rail, and air, with an upcoming metro project to enhance city mobility.

With a strong mix of IT, business, and education, Indore is emerging as one of the most attractive Tier-2 cities for GCC setup.

Also Read – Challenges in Setting Up a GCC

2. Coimbatore (Tamil Nadu) – Engineering & IT Powerhouse

Coimbatore, also known as the “Manchester of South India,” has a strong foundation in manufacturing, textiles, and engineering industries. In recent years, the city has also become a leading IT and software services hub.

Why Coimbatore for GCCs?

  • IT Infrastructure: Presence of TIDEL Park, KGISL IT Park, and SEZs has fueled the growth of IT and software development firms.
  • Talent Availability: Coimbatore has a high concentration of engineering and IT graduates from colleges like PSG Tech, CIT, and Kumaraguru College of Technology.
  • Cost Savings: Office space and operational costs are 30-40% lower compared to Chennai and Bangalore.
  • Business Environment: The city’s proactive policies support IT, manufacturing, and export-oriented businesses.

Coimbatore’s balanced mix of industrial strength and IT growth makes it a strategic location for GCC expansion.

3. Bhubaneswar (Odisha) – The IT & Business Hub of Eastern India

Bhubaneswar is one of India’s fastest-growing IT destinations and has earned recognition as a business-friendly city. It is home to a growing number of IT companies, financial services firms, and startups.

Why Bhubaneswar for GCCs?

  • Established IT Ecosystem: Companies like Infosys, Wipro, TCS, and Accenture have their development centers here.
  • Government Support: Special focus on IT and business parks like Infocity and Infovalley to attract investments.
  • Skilled Workforce: A large number of engineering and management graduates come from institutes like KIIT and Utkal University.
  • Cost-Effective Operations: Real estate, labor, and utilities are much cheaper compared to major IT hubs.

Bhubaneswar is ideal for companies looking for an affordable IT hub with strong government backing in Eastern India.

4. Jaipur (Rajasthan) – A Fast-Emerging Tech & Startup Destination

Jaipur, traditionally known for tourism and trade, is rapidly evolving into a major IT and startup hub in North India. The city is attracting both large enterprises and startups looking for affordable expansion options.

Why Jaipur for GCCs?

  • Growing IT Sector: The city has Mahindra World City IT SEZ, a key IT park attracting multinational companies.
  • Talent Pool: Institutes like IIT, MNIT, and private engineering colleges provide a skilled workforce for IT and BPO companies.
  • Infrastructure & Connectivity: Jaipur is well-connected to Delhi and other major cities via air, road, and rail.
  • Lower Cost of Living: Compared to Delhi and Gurugram, Jaipur offers significant cost savings on salaries, office spaces, and daily expenses.

With strong government initiatives and a growing tech sector, Jaipur is becoming a preferred GCC destination in North India.

5. Ahmedabad (Gujarat) – Business & Financial Hub

Ahmedabad is one of the most business-friendly cities in India, with a strong presence of IT, finance, and industrial sectors. The city is home to some of the largest corporate and IT companies, making it a high-potential destination for GCCs.

Why Ahmedabad for GCCs?

  • Presence of Over 140 GCCs & IT Firms: Many global companies have already set up operations here.
  • GIFT City – India’s Global Financial Hub: This smart city project is attracting fintech, IT, and outsourcing firms.
  • Strong Business Infrastructure: Ahmedabad has well-developed office spaces, SEZs, and industrial zones that support global operations.
  • Talent Supply: Educational institutions like IIM Ahmedabad, Nirma University, and DAIICT provide highly skilled graduates.

Ahmedabad’s combination of business-friendly policies and robust infrastructure makes it one of the best GCC destinations.

6. Mysuru (Karnataka) – Affordable Alternative to Bangalore

Mysuru is gaining attention as a cost-effective IT and outsourcing hub. It offers a great balance between quality of life, business opportunities, and operational savings.

Why Mysuru for GCCs?

  • Established IT Industry: Companies like Infosys, Wipro, and L&T Tech have already set up operations.
  • Lower Costs Compared to Bangalore: Office rent, salaries, and living expenses are significantly lower than in Bangalore.
  • Upcoming Tech Parks & SEZs: Several IT parks are being developed to attract GCCs.
  • High-Quality Talent: The presence of engineering and management colleges ensures a strong workforce.

For companies looking to expand beyond Bangalore, Mysuru provides a stable and cost-efficient alternative.

7. Vadodara (Gujarat) – Industrial & IT Growth Center

Vadodara has traditionally been an engineering and manufacturing hub, but it is now growing into a major IT and business destination.

Why Vadodara for GCCs?

  • Diverse Business Sectors: Presence of L&T, ABB, and IT startups makes it a growing commercial hub.
  • Close Proximity to Ahmedabad & Mumbai: Vadodara benefits from Gujarat’s strong economic growth.
  • Lower Cost of Operations: Compared to Tier-1 cities, office rents and salaries are much lower.
  • Growing IT Ecosystem: Several IT firms and BPOs have set up in the city, boosting employment.

Vadodara’s strategic location and business-friendly environment make it a promising destination for GCCs.

Final Thoughts: Choosing the Right Tier-2 City

Choosing a Tier-2 city for a GCC depends on factors like talent availability, infrastructure, and business policies. Indore and Coimbatore offer a strong IT talent pool, while Bhubaneswar provides government-backed incentives. Jaipur and Ahmedabad stand out for their business-friendly environment, while Mysuru and Vadodara offer affordability and growing industrial opportunities.

Each city has unique advantages, and the right choice depends on business goals and long-term scalability. As these cities continue to grow, they are becoming key locations for companies looking beyond traditional IT hubs.

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Frequently Asked Questions (FAQs)

  1. Why are GCCs moving to Tier-2 cities in India?
    GCCs are expanding to Tier-2 cities due to lower operational costs, a skilled workforce, improved infrastructure, and government incentives. These cities offer a cost-effective alternative to Tier-1 hubs while maintaining access to high-quality talent.
  2. Which Tier-2 city offers the best cost advantage for GCCs?
    Cities like Indore, Bhubaneswar, and Mysuru offer significant cost advantages with lower office rent, salaries, and operational expenses compared to metros like Bangalore and Mumbai.
  3. What challenges do companies face when setting up GCCs in Tier-2 cities?
    The main challenges include talent retention, infrastructure gaps, and limited access to global business networks. However, ongoing development, IT parks, and government support are helping overcome these issues.
  4. How do Tier-2 cities compare to Tier-1 cities for GCC growth?
    Tier-1 cities have a well-established ecosystem but come with high costs and talent competition. Tier-2 cities offer cost savings and fresh talent pools but may lack the same level of global connectivity and business clusters.
  5. Which Tier-2 city is best for IT and software GCCs?
    Coimbatore, Indore, Mysuru, and Bhubaneswar are top choices for IT and software GCCs due to their strong engineering talent pools, IT parks, and existing tech presence.
  6. Are there enough skilled professionals in Tier-2 cities for GCCs?
    Yes, many Tier-2 cities have top engineering and management institutes, producing a steady supply of skilled professionals. Cities like Indore, Ahmedabad, and Jaipur have strong academic ecosystems supporting GCC growth.
  7. How does government policy support GCC expansion in Tier-2 cities?
    Many state governments offer tax incentives, SEZs, and infrastructure support to attract businesses. Cities like Ahmedabad (GIFT City) and Bhubaneswar (Infocity) have dedicated zones to support IT and financial services.