India’s Tier-2 cities are no longer just support towns for the metros. With lower operational costs, skilled talent pools, and proactive government policies, cities like Ahmedabad, Coimbatore, and Mysuru are rapidly transforming into business hotspots. While metros face rising costs and congestion, Tier-2 cities are providing companies with the scalability, cost efficiency, and innovation-friendly environments they increasingly need.
Ahmedabad: Gujarat’s Economic Powerhouse
Ahmedabad stands out as a hub for petrochemicals, textiles, IT, and fintech, with GIFT City providing a modern financial and technology ecosystem. Business operations are supported by efficient infrastructure including airports, highways, and sustainability initiatives like Net Zero 2070. Government incentives such as single-window clearances and GCC Policy 2025–30 subsidies of up to Rs. 15 crore simplify business setups.
Key occupiers include global IT and ITeS firms, textile giants, pharmaceutical leaders, and automotive GCCs. Opportunities are emerging in fintech adoption at GIFT City, green manufacturing subsidies, and start-up innovation, attracting talent from institutions like IIM and NID.
Coimbatore: Precision Engineering Meets Industrial Growth
Coimbatore’s industrial strength lies in precision engineering, automotive components, and textiles. Supported by export-oriented industrial clusters, the city benefits from Tamil Nadu’s 2025 reforms, including MSME subsidies, land rebates, and skill development programs through TIDCO.
The city’s SIPCOT industrial parks, international airport, and reduced power tariffs ensure low-disruption manufacturing and logistics. Leading occupiers include engineering firms, auto part manufacturers, and textile exporters. The city’s growth opportunities focus on green energy subsidies, GCC expansions, and cluster development for MSMEs in engineering industries.
Mysuru: IT, Healthcare, and Aerospace Hub
Mysuru is evolving as an IT, healthcare, and aerospace destination, anchored by Infosys and a highly educated workforce. Karnataka’s Elevate program offers up to ₹50 lakh in support, while KITVEN funding and EODB single-desk portals accelerate approvals.
Scalable operations are supported by software parks, improved airport connectivity, and a tranquil environment conducive to business. IT majors, healthcare providers, and aerospace companies dominate the city’s occupier landscape. Emerging opportunities include start-up financing, IT policy incentives for GCCs, and aerospace manufacturing development.
Jaipur: Tradition Meets Technology
Jaipur combines traditional industries like jewelry and handicrafts with IT and tourism. RIICO zones host over 1,000 industrial units, supported by the 2024 Industrial Policy of Rajasthan offering 30% capital subsidies, 15-day Raj Nivesh approvals, and MSME loans.
Highways, industrial parks, and renewable energy incentives enhance business operations. Key occupiers include jewelry exporters, IT firms, tourism operators, and handicraft manufacturers. Opportunities lie in renewable energy initiatives, tourism-tech hybrids, and industrial park expansions.
Indore: Central India’s Logistics and Pharma Hub
Indore is emerging as a logistics, pharma, and food processing powerhouse. MPIDC policies offer 25% incentives, cluster funds, and single-window approvals. Smart City initiatives, rail centers, and power holidays streamline distribution and processing for businesses.
Major occupiers include IT, BPO, pharma, logistics, and food processing firms. Investment opportunities exist in e-commerce logistics, pharma clusters, and agri-processing ventures, making the city a prime location for cost-effective operations.
Bhubaneswar: Smart Governance and IT Growth
Bhubaneswar is strengthening its position in IT, biotech, and smart governance. The 2025 ITREX policy offers 50% land concessions and IPICOL single-window approvals. Biotech and IT scalability is enhanced through Infocity expansions and ₹1 crore start-up funds.
Occupiers include IT firms like Infosys, biotech pioneers, and governance technology providers. Emerging sectors include GCC expansions, biotech research, and smart city services.
Sector-Specific Growth Opportunities
GCCs and global firms are increasingly exploring Tier-2 cities like Ahmedabad and Mysuru for talent, subsidies, and scalable operations. Coimbatore supports industrial clusters, Jaipur and Bhubaneswar leverage tourism, and Indore excels in logistics and food processing.
Why Tier-2 Cities Matter
With targeted subsidies, rapid approvals, and innovation-friendly ecosystems, Tier-2 cities are offering businesses advantages that many metros no longer provide. Infrastructure upgrades, Smart City projects, and government incentives make these cities attractive for companies seeking cost-effective growth and long-term competitiveness. By 2030, these regions are expected to generate millions of jobs, helping decentralize economic growth while providing firms a strategic advantage in India’s evolving business landscape.
