Tier 2 cities emerge as next frontiers for India's growing GCC ecosystem

New Delhi: As global capability centre ecosystem is entering a new phase of growth, with emerging Tier 2 cities poised to play a larger role as companies look beyond traditional metropolitan hubs, according to an official.

Rajeshwar Singh Jenwar, Director and HoD, Software Industry Promotion Division, Ministry of Electronics and Information Technology (MeitY), said India's GCC (global capability centre) ecosystem has witnessed remarkable growth over the past five years.

"As per Nasscom data, in 2026, India is home to over 2,100 GCCs, which are running more than 3,700 units, generating close to 98.4 billion dollars in revenue and employing 2.36 million professionals. That is up from around 1,600 GCCs and revenue of 61 billion dollars just five years ago. What it tells that revenue is growing at the rate of 10 per cent.


"So CAGR is 10 per cent for revenue, and in terms of number of units and employment, CAGR is more than 6%. This is not incremental progress. This is India consolidating its position as the world's operating system for global enterprises," he said at a CII event.

Jenwar noted that the next chapter of GCC expansion will increasingly be driven by cities outside the established metropolitan centres.

"So, enterprises are now actively looking for alternatives. As we are talking, the shift is already happening. Roughly 10 per cent of GCC units are already in emerging tier-two cities. 6 per cent of the professionals are already in emerging tier two cities. Cities like Coimbatore, cities like Ahmedabad, Chandigarh, Trivandrum, Jaipur, cities like these," he said.

According to Jenwar, expanding the talent pipeline through reskilling and upskilling initiatives, ensuring the availability of Grade A office infrastructure, and improving ease of doing business and regulatory compliance will be critical to making these cities globally competitive.

"Then, talent development should also include initiatives on reskilling and upskilling, further availability of Grade A infra in Tier 2 cities, and ease of doing business and compliances," he said.

Industry leaders believe Tier 2 cities offer several structural advantages that could accelerate this transition, particularly in talent availability, employee retention and operating costs.

Kiran Cherukuri, Executive Vice President & Global Head, GCC Practice, HCLTech, said talent availability has become one of the biggest constraints in Tier 1 markets.

"So depth of talent is a challenge, Tier 1 cities are choked. They are choked for probably the availability of the talent, attrition hitting 20 to 25 per cent and whereas the tier 2, it is believed that the attrition levels are 10 to 12 per cent, so tier two is going to gain on that front. Cost, real estate cost anywhere between 30 and 40 per cent cheaper," he said.

However, Cherukuri stressed that attracting GCC investments requires states to first build a broader technology ecosystem rather than focusing solely on GCCs.

"So to the policymakers, my submission is that GCCs are an attractive industry segment. Probably GCCs will come a little later, but there has to be a tech ecosystem that needs to come to your state. So, this would be the startup ecosystem, the SME ecosystem and then the service provider ecosystem. They are the ones which are feeding to the GCC in tier 1 cities. So please do make sure that some of these aspects are also looked into."

Experts also underscored that sustaining GCC growth in Tier 2 locations will require targeted policy interventions.