New Delhi, April 16 -- India is quickly establishing itself as a hub for global capability centers (GCCs), with over 1,700 centers employing more than 1.9 million professionals. Traditionally concentrated in Tier 1 cities like Bengaluru, Hyderabad, Mumbai, and Delhi-NCR, GCCs have benefited from skilled talent, infrastructure, and established ecosystems. However, these urban centers are nearing saturation, prompting policymakers and industry leaders to look beyond the metros.
In the 2025 Union Budget announcement, the Indian government introduced a National Framework for GCCs. One of the major highlights of this framework is to incentivize expansion into Tier 2 and 3 cities, where there is untapped talent, lower operational costs, and further digital opportunities.
However, looking beyond Tier-1 cities for GCCs can come with its own set of challenges. "It's unlikely that a new player will set up a Global Capability Center (GCC) in a Tier 2 or 3 city right away. What we typically see is that companies with an established presence-say a process support center or an existing GCC in a Tier 1 city-might consider expanding to a Tier 2 location," Gaurav Gupta, Partner and GCC industry leader told TechCircle.
He further said that Deloitte has been working with the government and other industry leaders to explore the "twin-city" model. For example, if a company sets up in Bangalore, it can also be given an incentive to establish additional capacity in Mysore. Similarly, Delhi can be paired with Jaipur. "This twin-city approach could be a practical way to kickstart expansion because setting up a facility in a Tier 2 city independently is not very likely today," Gupta added.
States like Karnataka, Uttar Pradesh, and Tamil Nadu are already working on tailored policies and incentives to attract GCC investments into non-metro cities. These efforts include setting up IT parks, providing subsidies on capital expenditure, and simplifying compliance norms.
Deloitte is also actively working with the Karnataka government to explore the Beyond Bengaluru model-how to extend capacity to places like Mysore or Hubli. Similarly, the Uttar Pradesh government is deliberating on incentivizing companies to move some operations beyond Noida.
"What we're seeing is that many state governments are initially focusing on attracting GCCs to their main cities, and then exploring ways to extend that ecosystem into smaller towns. If that happens, it could significantly boost employability and regional development."
Smaller cities offer up to 30% lower operational costs compared to Tier 1 cities. Non-metro cities produce 60 percent of India's overall graduates from their engineering, arts, and science colleges, providing a substantial talent pool for companies including GCCs, Deloitte-Nasscom's report found.
Looking ahead, the success of this shift will depend on how effectively public and private stakeholders collaborate to build ecosystems in these emerging cities. If done right, India could see a more distributed GCC landscape.
Published by HT Digital Content Services with permission from TechCircle.