The Rise of Smaller Cities

How tier-2 and tier-3 cities like Indore, Coimbatore, Jaipur and Kochi are attracting jobs and investment, and why growth is spreading beyond the metros.

Growth is spreading beyond India’s biggest metros.

Why smaller cities are growing

Lower costs: rent and wages are cheaper.
Better connectivity: airports, highways and internet.
Remote work after 2020.
Quality of life: less congestion.
Talent from local colleges.

Examples

Indore: known for cleanliness and a growing IT and pharma base.
Coimbatore: pumps, motors, textiles and engineering.
Jaipur: gems, crafts, tourism and IT.
Kochi: port, shipyard, IT and tourism.
Bhubaneswar, Visakhapatnam, Lucknow and Chandigarh.

GCCs and startups

Global capability centres and startups are increasingly opening offices in tier-2 cities.

Challenges

Infrastructure gaps.
Talent pool still smaller.
Weak municipal finances.

Why it matters

Spreading growth reduces pressure on metros and brings opportunities closer to more Indians.

The Coimbatore office

A software firm opens an office in Coimbatore. Employees save on rent, commute in minutes and live near family, while the firm pays lower costs than in Bengaluru.

Thinking only metros offer good jobs

Tier-2 cities are attracting IT, manufacturing and startups.

Key takeaways

Tier-2 and tier-3 cities are growing faster in some sectors.
Lower costs and connectivity attract firms.
Indore, Coimbatore, Jaipur and Kochi are examples.
Infrastructure and municipal finances are challenges.