Tier-2 Cities: India’s Hidden GCC Goldmine

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Hi everyone,   

Bengaluru has been the poster child of India’s GCC boom. Nearly one-third of all GCCs in India sit here, powering everything from IT services to R&D hubs.  

But as always, success breeds strain. Rising commercial rents, saturated talent markets, and infrastructure bottlenecks are starting to weigh on the city’s long-term attractiveness. 

Truth is, while Bengaluru, Hyderabad, Pune, and Gurugram will always remain critical hubs, firms looking to expand or establish their GCCs can no longer rely solely on tier-1 cities.  

The next wave of growth lies elsewhere: in India’s tier-2 cities, which offer whitespace opportunities without the same cost and infrastructure headaches.

And this is where smart firms will play their next move. Let’s break down why.  

A Cost Equation That Works in Your Favour 

For years, Bengaluru and Hyderabad made sense because the ecosystem was mature. These were the cities where the talent was abundant, infrastructure was developed, and the brand pull was strong.  

But success has inflated costs beyond what many mid-sized or even large firms can justify. 

• Grade A office rentals in Bengaluru now average £1.14–£1.33 ($1.44–$1.68) per sq. ft./month, levels comparable to some secondary US cities. By contrast, tier-2 hubs like Kochi, Jaipur, or Indore offer rentals in the £0.57–£0.71 ($0.72–$0.90) range, even in prime areas.  

• Salaries tell the same story: experienced GCC managers in Bengaluru command premium pay, while equally skilled professionals in tier-2 cities cost 20–30% less.  

• Add in transport, housing allowances, and urban inflation, and the overall operating expense can run 35–40% higher in tier-1 hubs compared to tier-2 ones.  

Case in point: Kochi has steadily attracted finance and IT GCCs because of its lower rentals and cost of living, while still maintaining international air connectivity. Mid-market firms see this as a win-win: lower cost, easier expansion. 

For firms this means that cost arbitrage lies in choosing the right Indian city when deciding to diversify into tier-2 locations, so they can run leaner without compromising quality. 

A Wider, More Stable Talent Pool 

Talent availability is no longer confined to the big four metros.  

As India’s education system scaled, the bulk of technical and financial graduates began coming from outside the traditional hubs. Today, talent concentration is actually shifting away from Bengaluru and Hyderabad. 

• Over 60% of India’s engineering graduates emerge from tier-2 and tier-3 cities. States like Tamil Nadu, Maharashtra, and Odisha are consistently producing high-quality talent.  

• Bengaluru’s attrition rate in IT-heavy roles often exceeds 20–25%, driven by intense competition. Tier-2 cities, by contrast, average in the 12–15% range, meaning more stability and less churn.  

• This creates a loyalty advantage: employees in tier-2 hubs view GCC jobs as long-term careers, not stepping stones to the next metro employer.  
   

Case in point: Bhubaneswar, Orissa, is now being positioned by NASSCOM as an analytics and financial services hub, thanks to its steady stream of business graduates. A few GCCs have already moved in, citing lower attrition and strong university partnerships. 

For your business, lock in university partnerships now in tier-2 hubs so your firm has access to steady pipelines of talent that aren’t already saturated by 20 competing multinationals.  

De-risking Through Diversification 

If the pandemic taught firms anything, it’s the danger of concentration risk. Relying too heavily on one city makes operations vulnerable to local disruptions like strikes, infrastructure outages, or cost spikes. 

By setting up GCCs in tier-2 Indian cities and adopting a multi-hub strategy firms can: 

• Spread operations across multiple geographies, insulating themselves from regional disruptions. 

   

• Capture tax incentives, faster clearances, and infrastructure push that smaller cities with proactive state government support offer to attract GCC investments.

• Gain more than cost and talent advantages and utilise diversification as a means for a stronger long-term global strategy. 

Case in point: Coimbatore has attracted GCCs in engineering design and financial services, with firms citing better quality of life for employees, lower churn, and strong government support. Vizag, meanwhile, is betting on BFSI and analytics GCCs, backed by new IT parks and port connectivity.  

In fact, Samera’s own AI Innovation Centre is nestled in Coimbatore, so if you’re around do stop by! 

Think of tier-2 hubs as a hedge against disruption. By diversifying now, you protect your global operations and unlock growth capacity before constraints in metros force your hand. 

The Road Ahead with Samera 

GCC growth in India is entering a new phase. The metros will remain anchors, but they can’t carry the full load of demand anymore. Tier-2 hubs are where firms will find the next leap in affordability, talent depth, and resilience. 

At Samera Global, this is exactly what we help businesses design: future-ready GCCs that aren’t locked into old cost vs. quality trade-offs, but structured to create long-term competitive advantage. 

👉 Not yet sure where your GCC belongs? We can help you decide. Start here: 

Cheers, 

Arun 

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