Tier-2 cities reshape India’s GCC landscape
InCommon report analyses the growing role of Tier-2 cities in India’s Global Capability Center expansion.
www.incommon.ai
InCommon has released its GCC Tier 2 Report 2025, documenting how India’s Tier-2 cities are increasingly hosting technology-intensive Global Capability Centers (GCCs) and contributing to the next phase of global enterprise growth beyond traditional metropolitan hubs.
Rising share of Tier-2 cities in India’s GCC ecosystem
The report shows a measurable shift in the geographic distribution of GCCs in India. Tier-2 cities increased their share of the national GCC footprint from 5% in 2019 to 7% in 2025, representing a two-percentage-point rise over six years.
India currently hosts more than 1,700 active GCCs, of which over 170 operate across 18 Tier-2 cities. These include Ahmedabad, Vadodara, Indore, Bhubaneswar, Coimbatore, Kochi, Lucknow, Jaipur, Nagpur and Mysuru. According to the report, nearly two new GCCs are being established each week, indicating sustained demand for India as a global operations and engineering base.
Shift toward high-value technology functions
Tier-2 locations are no longer limited to support or back-office operations. The report identifies a growing concentration of GCCs focused on higher-value functions such as artificial intelligence, data engineering, software and platform development, product research and development, cloud computing and cybersecurity.
This evolution reflects enterprise requirements for scalable digital capabilities combined with access to skilled engineering talent outside saturated metro markets.
Cost, talent, and retention dynamics
InCommon’s analysis highlights structural advantages driving GCC expansion into Tier-2 cities. These locations typically offer a cost base approximately 25% lower than Tier-1 cities, along with attrition rates that are 20–30% lower.
The report also notes a growing pipeline of STEM graduates supported by regional universities and technical institutions, enabling companies to build stable, long-term teams for complex engineering and R&D work.
Role of state-level policy and infrastructure
State governments are playing a central role in accelerating Tier-2 GCC adoption. Tamil Nadu, Karnataka, Uttar Pradesh and Gujarat are cited as examples where targeted policies, infrastructure investments and incentives are encouraging enterprises to establish deeper operational footprints beyond major metros.
These measures include technology parks, improved connectivity, and support for industry-academia collaboration, which collectively reduce setup risk for global enterprises.
Emerging regional specialization
The report identifies early signs of functional specialization across Tier-2 hubs. Bhubaneswar and Vadodara are developing strengths in semiconductor-related activities and research functions. Kochi and Warangal are expanding in digital engineering, cloud platforms and fintech technologies. Coimbatore, Indore and Ahmedabad are evolving as multi-sector innovation clusters supported by manufacturing ecosystems and strong academic linkages.
Implications for India’s enterprise growth model
InCommon concludes that Tier-2 cities are following a trajectory similar to earlier Tier-1 GCC growth, but with stronger policy alignment and institutional learning from the first wave of expansion. This shift is contributing to a more distributed and resilient GCC ecosystem.
As enterprises diversify location strategies to balance cost, talent availability and scalability, Tier-2 cities are positioned to play a defining role in shaping India’s next decade of global enterprise and technology transformation.
www.incommon.com
