Table of Contents 

1. Introduction 
2. Tier-2 Cities for GCC Growth: The Emerging Debate 
3. Bengaluru's Continued Leadership in the GCC Ecosystem 
4. The Rise of Tier-2 Cities as Strategic GCC Expansion Hubs 
5. Emerging Tier-2 GCC Hotspots in India 
6. Cost and Talent Advantages of Tier-2 Cities 
7. Why Bengaluru Continues to Maintain Ecosystem Dominance 
8. The Hub and Spoke Model Shaping Future GCC Expansion 
9. Strategic Location Considerations for Global Enterprises 
10. Conclusion 

Introduction 

India continues to anchor the global capability center landscape, with multinational enterprises accelerating their footprint across a widening set of cities. The conversation among enterprise leaders has moved beyond whether to establish a GCC in India, and toward a more nuanced question: where within India delivers the greatest strategic return? Tier-2 cities are gaining measurable momentum, even as Bengaluru maintains its position as the most mature and established GCC ecosystem in the country. 

Recent market data and enterprise behavior suggest that the growth narrative is shifting toward a distributed, hub-and-spoke model, where regional cities function as complementary expansion nodes rather than direct replacements for established metros. Organizations evaluating their India location strategy often work with experienced global capability center setup specialists to navigate talent availability, infrastructure readiness, and policy incentives across the country. This article examines whether Tier-2 cities could realistically challenge Bengaluru's leadership and how global enterprises should approach GCC location strategy in this evolving landscape. 

Tier-2 Cities for GCC Growth: The Emerging Debate 

The expansion of Global Capability Centers in India has triggered a substantive discussion among C-suite leaders and enterprise real estate decision-makers about the long-term role of secondary cities. While Bengaluru retains the largest share of GCC activity, companies are increasingly exploring alternative locations to address three structural pressures: rising operational costs in established metros, intensifying competition for specialized talent, and infrastructure saturation in high-demand corridors. 

The emerging consensus is that Tier-2 cities are not replacing Tier-1 hubs. Instead, they are functioning as strategic extensions within distributed GCC networks, enabling enterprises to diversify delivery risk while accessing new pools of skilled talent. This shift reflects a broader maturation of India's GCC ecosystem from a concentration model toward a more distributed, resilient architecture. 

Bengaluru's Continued Leadership in the GCC Ecosystem 

Bengaluru continues to anchor India's GCC landscape with an unmatched concentration of capability centers. The city currently hosts approximately 40% of India's total GCCs and accounts for over 12 million square feet of GCC office leasing, a figure that substantially outpaces all other Indian cities, with Pune at 4.8 million square feet and Hyderabad and NCR each at approximately 4.5 million square feet. 

The city is projected to grow at 8.5% annually through 2035 and is expected to double its current GCC count by 2029, supported by strong state policy and sustained enterprise investment. Three structural advantages underpin this trajectory:

• Deep specialized talent: Bengaluru hosts the largest concentration of professionals in artificial intelligence, semiconductor engineering, cloud computing, and data science in India 
• Innovation and startup density: The city is the world's fifth-largest unicorn hub, with 53 of India's 122 unicorns headquartered there, representing 42% of the country's total unicorn value 
• Grade A infrastructure: Office corridors such as Whitefield, Outer Ring Road, and Sarjapur Road continue to absorb global enterprise demand with strong international connectivity 

The Rise of Tier-2 Cities as Strategic GCC Expansion Hubs 

Over the past several years, enterprises have begun establishing GCC operations in smaller cities to diversify risk and access emerging talent pools. GCC leasing in Tier-2 cities nearly doubled in FY2025, with the share rising from 7% in FY2024 to between 15% and 20% in FY2025. Approximately 25% of new GCC setups in India over the past three years have been located in Tier-2 cities, signaling a durable structural shift. 

Hiring data reinforces this trend. Tier-2 cities recorded a 21% year-on-year growth in GCC hiring in 2025, compared to 11% growth in metro cities, according to data published by foundit. While metro locations still account for 91% of total GCC job share, the hiring velocity in secondary cities is significantly higher, suggesting that the next wave of GCC scale-up is increasingly regional. 

Emerging Tier-2 GCC Hotspots in India 

India currently hosts over 1,700 active GCCs, with more than 170 positioned across 18 Tier-2 cities at a pace of nearly two new GCCs being established every week in these locations. Several cities are rapidly developing into credible GCC destinations: 

• Ahmedabad: Supported by proactive state policy and strong financial services infrastructure 
• Coimbatore: Emerging as a hub for engineering, manufacturing technology, and product-focused GCCs 
• Pune: A mature secondary hub with a large and established presence of engineering and technology capability centers 
• Kochi and Thiruvananthapuram: Gaining traction in technology services and specialized engineering 
• Bhubaneswar and Jaipur: Gaining recognition for improving digital infrastructure and growing talent pipelines 

The Tier-2 share of India's total GCC count has risen from 5% in 2019 to 7% in 2025, according to InCommon's GCC Tier 2 Report 2025. While this represents incremental progress in absolute share, the growth trajectory and the pace of new unit formation signal a more significant shift over the medium term. 

Cost and Talent Advantages of Tier-2 Cities 

Tier-2 locations offer several economic and operational advantages that are increasingly relevant to enterprise location decisions. Total Cost of Operations (TCO) in Tier-2 cities is typically 10% to 35% lower than comparable Tier-1 centers, with cities like Mysuru offering particularly favorable economics relative to Bengaluru. Over 200 GCCs have already created demand for more than Rs. 30,000 crore worth of commercial real estate in Tier-2 and Tier-3 cities, which reflects both investor confidence and improving supply. 

Beyond cost, Tier-2 cities offer structural talent advantages: 

• Improved attrition: Lower employer competition typically results in higher workforce retention 
• Access to regional graduate talent: A large share of India's engineering graduates originate from smaller cities, reducing the bottleneck that characterizes hiring in saturated metro markets 
• Faster fresher integration: GCC hiring data shows that more entry-level professionals are now securing roles in their home cities, improving organizational onboarding at scale 

Why Bengaluru Continues to Maintain Ecosystem Dominance 

Despite the rise of secondary cities, Bengaluru maintains structural advantages that are difficult to replicate in the short to medium term. The city's depth of specialized talent, particularly in deep technology disciplines, represents decades of institutional investment in engineering education, corporate capability building, and innovation infrastructure. South India as a region accounts for 64% of India's total GCC activity, with Bengaluru alone driving the majority of that share.  

The broader enterprise ecosystem, including global technology companies, research institutions, and venture capital networks, creates an integrated innovation environment that secondary cities have not yet replicated at scale. State-level policy support through Karnataka's GCC initiatives and the state's Rs. 3,600 crore Fund-of-Funds for startups reinforces Bengaluru's long-term position as the primary headquarters location for global capability centers. 

The Hub and Spoke Model Shaping Future GCC Expansion 

Many multinational organizations are formalizing a hub-and-spoke operating model in response to shifting GCC dynamics. Tier-1 cities serve as strategic leadership and innovation hubs, while Tier-2 cities support operational scale, specialized functions, and talent diversification. The benefits are measurable: regional talent pools reduce concentration risk, distributed operations lower single-city dependency, and regional delivery nodes reduce the blended cost per employee across the network. Organizations partnering with integrated execution platforms such as Embark Group are better positioned to align GCC mandates with city-specific talent and infrastructure realities, ensuring both hub and spoke locations deliver sustained performance rather than short-term cost arbitrage. 

Strategic Location Considerations for Global Enterprises 

Enterprises evaluating GCC expansion should treat location strategy as a multi-variable decision anchored to long-term mandate, not near-term cost optimization. The core assessment dimensions include talent availability, infrastructure readiness, long-term cost structure, scalability potential, and the stability of the state-level policy environment. For organizations with mandates spanning innovation, delivery, and enterprise transformation, a single-city strategy introduces concentration risk that a well-structured distributed model is better positioned to absorb. 

Future Outlook for GCC Growth in India 

The Indian GCC ecosystem is projected to grow into a market exceeding $100 billion by 2030, from its current scale, driven by expanding mandates, deeper enterprise integration, and a broadening geographic footprint. Tier-2 city GCC counts are projected to grow toward 2,100 active GCCs by FY28 at an approximately 8% CAGR across India. The next phase of expansion will likely be defined by three converging trends: 

• Increasing adoption of distributed city networks by large multinational enterprises 
• Growth of innovation clusters outside traditional metros, supported by stronger state-level policy 
• Deeper integration between GCC functions and India-based talent development ecosystems 

Tier-2 cities will continue to grow rapidly. However, the data and structural conditions suggest they are positioned to complement, rather than replace, Bengaluru and other major hubs. The most durable GCC growth strategies will be those that treat geographic diversification not as a cost-reduction tactic, but as a long-term resilience and capability-building imperative. 

Conclusion 

India's GCC ecosystem is entering a sustained phase of geographic diversification. While tier-2 cities are gaining real and measurable momentum, Bengaluru continues to maintain leadership through ecosystem maturity, infrastructure scale, and unmatched depth of digital expertise. For global enterprises, the most effective location strategy combines the strengths of both through a distributed hub-and-spoke model that balances innovation leadership with operational scalability across India's expanding regional markets.