Overcoming Infrastructure Concerns for GCCs in Tier 2 Cities

“The infrastructure isn’t ready.”

That’s the most common pushback when global brands explore setting up GCCs in Tier 2 cities like Indore, Bhubaneswar, or Coimbatore. And to be fair, a few years ago, they weren’t wrong.

Tier 2 cities struggled with inconsistent internet, patchy logistics, lack of scalable office spaces, and a talent pool that either migrated out or stayed undertrained. For years, these cities were seen as second-best—ideal for backend support, but rarely for innovation or leadership roles.

But that’s changing—fast.

Today, Tier 2 cities are building IT parks with 24×7 uptime, hosting cloud-native companies, and welcoming professionals who are choosing quality of life over metro chaos. From private investments in plug-and-play workspaces to government-backed digital infrastructure and talent skilling programs, the groundwork for next-gen GCCs is actively being laid.

In this blog, we’ll cut through the noise and address the real infrastructure concerns holding brands back—and show how they’re being solved, one city at a time.

The Infrastructure Challenge: What’s Really Holding GCCs Back?

If you’re evaluating Tier 2 cities for your next GCC setup, you’re probably asking some hard questions—Will the internet be reliable? Can we scale our office space quickly? Are there backup systems if something fails?

These aren’t hypothetical concerns—they’re the practical, often deal-breaking factors that influence boardroom decisions. Let’s break down what’s really going on under the hood.

Office Spaces: More Cafés Than Campuses

Unlike Bengaluru or Hyderabad, where you can choose from a dozen ready-to-move-in tech parks, many Tier 2 cities still lack high-quality commercial real estate built for scale. You’ll find coworking spaces and smaller buildings, but if you’re planning to onboard 200+ engineers in year one, you’ll need real estate partners who can grow with you.

Power & Internet Reliability: Not Just a Luxury

Tier 2 cities have improved a lot in the past five years, but uninterrupted power and high-speed internet are still patchy in some pockets. A 20-minute power cut might not seem like much—until it’s your quarterly security audit day or your US-based client is on a live demo.

Public Transport and Road Access: A Daily Bottleneck

Accessibility is often overlooked—until it affects employee retention. If your team has to travel 45 minutes through congested or unsafe areas just to get to work, the shine of a low-cost Tier 2 location fades quickly. The lack of robust public transport systems also limits talent mobility.

Ecosystem Maturity: Where’s the Support Network?

In a Tier 1 city, setting up a GCC feels like plugging into a well-oiled machine. You’ve got consultants, legal firms, HR vendors, and compliance experts around the corner. In Tier 2, you’re building some of that ecosystem from scratch—unless you have a partner who knows the terrain.

And yet, none of these issues are deal-breakers. In fact, many GCCs are solving them in creative, cost-effective ways—and thriving in the process. The next sections will show how both government and private players are filling the gaps, and what smart brands are doing to stay ahead.

Government-Led Infrastructure Initiatives: Quietly Powering the Shift

Let’s bust a myth: Tier 2 cities aren’t waiting around for private players to do all the heavy lifting. In fact, some of the most strategic infrastructure upgrades are being led by the government—and they’re happening faster than most people think.

Smart Cities Are No Longer Just a Buzzword

Ever heard of the Smart Cities Mission? It’s not just about putting Wi-Fi in public parks. Cities like Indore, Surat, and Vishakhapatnam have been pouring resources into real-time traffic management, automated waste systems, digital governance, and improved civic amenities. For a GCC leader, this means smoother commutes, cleaner work environments, and better quality of life for your employees—especially those relocating from metros.

Plug-and-Play IT Parks Are Expanding Beyond Metros

State governments are investing in Special Economic Zones (SEZs) and IT/ITES parks that are purpose-built for companies like yours. Think high-speed leased lines, round-the-clock security, backup generators, and even in-campus daycare. Cities like Bhubaneswar, Coimbatore, and Nagpur are already showcasing these as business-ready zones—with space to scale.

Policy Incentives That Actually Move the Needle

This isn’t just lip service. Governments are offering real incentives to attract GCCs:

• Subsidies on electricity and internet bandwidth.
• Stamp duty exemptions on leased commercial spaces.
• Capital support for setting up training centers.
• Faster single-window clearances for registrations and compliance.

Take Telangana, for example. Their “GRID” (Growth in Dispersion) policy actively encourages tech expansion beyond Hyderabad by offering sweeteners like performance-linked incentives and financial aid for infrastructure development.

Workforce Development Is Getting a Major Boost

Programs like PMKVY (Pradhan Mantri Kaushal Vikas Yojana) and state-level skilling initiatives are aligning local talent with digital-first roles. Governments are partnering with universities and private training providers to ensure that young graduates are not just employable—but GCC-ready.

Strategic Recommendations for GCC Planners

If you’re serious about expanding into Tier 2 cities, infrastructure concerns can’t be brushed aside—but they also shouldn’t paralyze you. The key is to approach it with strategy, data, and strong local partnerships. Here’s how to make smart, infrastructure-savvy decisions when building a GCC outside the metro comfort zone.

1. Perform City Readiness Audits

Before you commit, run a thorough city audit across three fronts:

• Real Estate: Are there scalable, tech-ready office spaces available within your required timeline?
• Connectivity: How reliable are internet speeds, power backups, and mobile networks in your target micro-markets?
• Talent Pool: What does the local supply look like for the roles you’re hiring? Are there feeder colleges or training hubs?

This helps you go beyond assumptions and build an evidence-based playbook for each location you’re considering.

2. Leverage Public-Private Partnership (PPP) Models

You don’t have to go it alone. Several cities offer PPP frameworks where government and private players jointly develop infrastructure:

• IT parks on leased land with shared capital investments.
• Co-created skilling academies tailored for specific GCC needs.
• Shared services infrastructure, such as data centers and utility backups.

Engaging in a PPP model can give you preferential access, faster clearances, and reduced costs—especially if you’re among the early entrants.

3. Adopt a Hybrid Physical-Virtual Infrastructure Model

Don’t treat infrastructure as binary. You can de-risk early-stage operations by combining lean physical setups with robust virtual workflows. For example:

• Use a managed workspace for core leadership and compliance functions.
• Enable remote-first teams for engineering, QA, or support.
• Invest in cloud-native tools, secure VPNs, and collaboration platforms from day one.

This approach lets you scale thoughtfully without overcommitting to physical assets upfront.

4. Engage Local Ecosystem Players Early

Want to hit the ground running? Start building relationships—before you sign your lease.

• Talk to state IT departments for incentive clarity.
• Partner with local colleges for custom talent pipelines.
• Onboard regional vendors for HR, compliance, and facilities support.

The earlier you tap into the local ecosystem, the smoother your setup will be. Think of it as building your own micro-GCC support network.

5. Start with Satellite Teams or CoEs

If you’re still testing the waters, don’t jump into a full-scale build. Instead, set up a Center of Excellence (CoE) or a specialized pilot team in a Tier 2 city. Focus on one function—like DevOps, R&D, or analytics—and monitor:

• Team productivity
• Infrastructure uptime
• Local collaboration dynamics

It’s a low-risk way to validate the city’s readiness while giving you real, operational insights that no research report can offer.

Conclusion

The narrative that Tier 2 cities aren’t ready for Global Capability Centers is outdated.

Yes, there are challenges—but they’re being actively solved. From high-speed internet to managed office spaces, from skilled local talent to evolving digital ecosystems, the pieces are falling into place. The smartest brands are no longer asking if Tier 2 cities can support GCCs. They’re asking how soon they can start.

The real edge lies in being an early mover—locking in talent, infrastructure, and incentives before the crowd shows up.

At Supersourcing, we’re helping companies do exactly that. Whether you’re scouting cities, testing a pilot team, or scaling a full-fledged GCC, we offer on-ground support that bridges the infrastructure gap—so you can focus on building, not firefighting.

FAQs

Are Tier 2 cities suitable for scaling up to 500+ employees?
Absolutely. While not every city is ready to scale instantly, several—like Indore, Coimbatore, Bhubaneswar, and Nagpur—offer expanding real estate, strong talent pipelines, and maturing ecosystems that can support large GCC operations with proper planning.

What if reliable internet and power are not guaranteed in the area I choose?
Partner with real estate developers who specialize in Grade-A tech parks with leased-line internet, generator backups, and on-site IT support. Managed office providers also ensure uptime SLAs, even in smaller cities.

Can I start small in a Tier 2 city before fully committing?
Yes, and it’s recommended. Set up a satellite team or Center of Excellence (CoE) for a specific function (like DevOps or QA), and test the waters before scaling. This helps assess infrastructure resilience and team productivity firsthand.

How do I find reliable local vendors for HR, IT, and compliance in Tier 2 cities?
Supersourcing has a vetted network of regional partners and vendors across multiple Tier 2 cities. We handle vendor matchmaking, compliance, and setup support—saving you months of groundwork.

Will my employees be willing to relocate to or stay in Tier 2 cities?
Yes, especially with the rise in reverse migration and improved quality of life in non-metro cities. Many professionals prefer returning to their hometowns if the opportunities and infrastructure are stable—making retention easier than in metros.