Introduction
India’s Global Capability Centre (GCC) ecosystem has grown beyond its traditional metropolitan hubs. Bengaluru, Hyderabad, Pune, Chennai, Mumbai and Delhi NCR continue to attract major corporate investments, but companies are also examining opportunities in emerging business locations.
For some organisations, the next stage of expansion may involve establishing a secondary centre in a smaller city rather than adding more employees or office space to an existing metropolitan location.
This approach can help companies access different talent pools, diversify their operational footprint and explore alternative cost structures. It can also create opportunities to build specialised teams in locations where particular skills, educational institutions or industry clusters are available.
However, expanding into a Tier 2 city is not simply a matter of finding a less expensive office. A GCC needs to assess whether the location can support its workforce, technology infrastructure, management requirements and long-term business objectives.
Research published by CBRE in March 2026 identifies Tier 2 cities as emerging extensions of enterprise footprints, supported by factors including talent availability, connectivity and potential cost advantages. Colliers’ July 2026 research also describes a broadening of India’s GCC demand beyond traditional technology-led markets. These developments indicate that companies are examining more diverse location strategies, although the suitability of any individual city depends on the requirements of the business.
For GCC leaders, the important question is not whether a smaller city is automatically better than an established hub. It is whether that location can support a specific business function effectively.
This guide explains how GCCs can evaluate Tier 2 locations, assess talent and office requirements, compare expansion models and plan a multi-city operating strategy.
1. Why GCCs Are Considering Tier 2 Cities
A GCC may consider a smaller city for several reasons. The strongest case usually combines a clear talent requirement with an operational model that the location can support.
Access to different talent pools
Established metropolitan hubs offer extensive talent markets, but competition for specialised professionals can be intense.
A Tier 2 location may provide access to graduates from regional universities, professionals with relevant industry experience and employees who prefer to remain closer to their existing communities.
The opportunity depends on the skills required. A city with strong engineering institutions may be suitable for certain technology or manufacturing-related functions, while another may have a relevant financial services, analytics or business operations talent pool.
Companies should evaluate the available skills rather than assume that a large graduate population automatically translates into an immediately accessible workforce.
Diversifying the operating footprint
A company operating from a single city may face concentration risks. These can include local infrastructure disruptions, intense recruitment competition or difficulties securing additional office capacity at the required time.
A second location can distribute some activities across different markets.
However, diversification creates its own management requirements. Teams in separate cities need effective communication, consistent processes and clear reporting relationships.
A multi-city footprint is therefore most useful when the business has a clear reason to distribute work rather than simply replicate the existing office elsewhere.
Exploring different cost structures
Office occupancy and employee-related costs can influence location decisions.
A smaller city may offer a different cost structure from a major metropolitan market, but the actual comparison depends on the location, building quality, workforce requirements and operational model.
Companies should calculate total operating costs rather than compare office rents alone.
Recruitment expenses, employee retention, connectivity, travel, technology infrastructure and management overhead can all affect the financial outcome.
Supporting long-term expansion
A secondary location can give a GCC additional options as its mandate develops.
For example, a company may establish a specialised team in one city while retaining its principal leadership and larger operational functions in an established hub.
The secondary centre can then grow according to the needs of the business, provided the location continues to offer the required skills and infrastructure.
2. Which Tier 2 Cities Should a GCC Evaluate?
There is no universal shortlist that suits every GCC. City selection should begin with the company’s industry, required skills, operating model and expected scale.
Cities such as Coimbatore, Ahmedabad, Kochi, Jaipur, Indore and Bhubaneswar may be worth evaluating for particular requirements. However, their suitability should be established through location-specific research rather than assumptions about their overall attractiveness.
Coimbatore
Coimbatore may be worth assessing for companies seeking engineering, manufacturing-related, technology or business operations capabilities.
Its educational institutions and established industrial ecosystem may be relevant to certain GCC mandates.
A company considering the city should investigate the availability of the specific skills it needs, the depth of experienced talent, connectivity and the supply of office space suitable for its operations.
Ahmedabad
Ahmedabad may warrant consideration for businesses exploring engineering, manufacturing, financial services or related corporate functions.
The location assessment should examine the relevant industry ecosystem, access to experienced professionals, office infrastructure and the availability of suppliers or business partners.
Companies should also determine whether the local talent market can support the proposed functions as the centre grows.
Kochi
Kochi may be considered by companies assessing technology, digital services, business operations or other functions that align with its available talent pool.
The decision should account for the specific skills required, recruitment capacity, connectivity and the availability of suitable workplace infrastructure.
The company should also establish whether it can recruit enough experienced professionals to support its intended operating model.
Jaipur
Jaipur may be worth evaluating for selected technology, analytics and business operations requirements.
Before making a commitment, the company should assess the availability of relevant graduates and experienced employees, the local commercial real estate market and the practical requirements of managing the centre.
The location should be judged against the same criteria used for other shortlisted cities.
Indore
Indore may be relevant to companies considering technology, analytics or selected corporate operations.
Its suitability will depend on the depth of the required talent pool, the availability of appropriate office facilities and the ability to support the centre’s operating requirements.
Companies should investigate whether the location can support the initial team and the expected hiring trajectory.
Bhubaneswar
Bhubaneswar may be considered by companies exploring technology, engineering or business operations functions.
The assessment should examine the relevant educational ecosystem, availability of experienced talent, commercial office supply and connectivity.
As with other emerging locations, a promising initial talent pool does not necessarily guarantee that a centre can scale quickly. Recruitment forecasts should be validated before committing to a large office footprint.
Important: These cities are examples for evaluation, not a ranking of India’s best Tier 2 GCC destinations. A company should build its shortlist around the skills, infrastructure and operating requirements of its proposed centre.
3. Evaluate Talent Availability Before Selecting a City
Talent is one of the main reasons companies establish GCCs in India. A location strategy that reduces office costs but makes recruitment difficult may not deliver the expected business value.
The assessment should examine both the number of available professionals and their suitability for the proposed work.
Map the skills required
Start by listing the roles the GCC expects to recruit during its initial phase and subsequent expansion.
Separate entry-level positions from roles requiring several years of experience or specialised expertise.
For example, a centre requiring software engineers, cloud specialists and experienced engineering managers may need to assess the availability of each group separately.
A city may offer a promising graduate pipeline but have a smaller pool of senior professionals. That distinction can affect recruitment timelines and the need to transfer experienced employees from another location.
Examine the local education ecosystem
Identify universities, technical institutions and professional training providers that may support recruitment.
Consider the courses offered, graduate output, relevant specialisations and opportunities to build relationships through internships, campus recruitment or joint training programmes.
The existence of an institution is not sufficient evidence that it can supply the required skills. Companies should evaluate the quality and relevance of the talent pipeline for their particular needs.
Validate recruitment assumptions
Speak to recruitment partners, review relevant job-market information and assess the availability of professionals with the required experience.
Where possible, test the market by recruiting a small initial team before committing to a large expansion.
This can help identify salary expectations, recruitment timelines, skill gaps and the level of competition from other employers.
Plan for employee retention
Recruiting employees is only part of the challenge. The centre also needs to retain them as the business grows.
Career development, compensation, management quality, training and access to interesting work can influence retention.
A smaller city should not automatically be assumed to have lower attrition. The company should examine the local employment market and understand what would encourage employees to remain with the organisation.
4. Assess Office Infrastructure and Workplace Availability
A city may have a suitable talent pool but still lack the type of office infrastructure required by the GCC.
The company should examine the local real estate market before deciding whether the location can support its initial launch and future expansion.
Evaluate the available office stock
Identify properties that meet the centre’s requirements for location, capacity, building quality and infrastructure.
Consider whether the available space can support the expected headcount, technology requirements, security arrangements and employee facilities.
The company should also assess whether additional capacity is likely to be available if the team expands.
A property that meets the initial requirement may not be suitable if the GCC expects to double its workforce within a short period and cannot secure adjacent space.
Compare the available workplace models
Depending on the city and local supply, the company may consider:
- A traditional leased office
- A managed office
- A flexible workspace
- A smaller initial office with a planned expansion arrangement
The availability and suitability of each option must be confirmed in the specific market.
A managed or flexible workspace may help a company establish a presence without taking responsibility for every aspect of the office setup. A traditional lease may offer greater control over the layout and infrastructure.
The right choice depends on the scale, duration and requirements of the operation.
Verify technology and power infrastructure
The workplace must support the GCC’s connectivity, power, security and equipment requirements.
Companies should establish whether suitable internet services, backup arrangements, access controls and facilities are available.
A centre with specialised infrastructure needs may require a more detailed technical assessment than a team performing standard business operations.
Examine commuting and employee access
The office should be accessible to the employees the company intends to recruit.
Assess public transport, road connectivity, travel times and the availability of relevant local amenities.
A workplace that is difficult for employees to reach may undermine recruitment and attendance, even if the commercial terms appear attractive.
5. Compare Total Operating Costs, Not Just Office Rent
A location comparison should use a consistent financial model.
Comparing the quoted rent in a metropolitan hub with the rent in a smaller city is not enough to establish which option delivers better value.
Include the main cost categories
The financial assessment may include:
- Office rent and maintenance charges
- Utilities and facilities management
- Fit-out and furniture
- Technology infrastructure
- Recruitment and onboarding
- Compensation and benefits
- Training and employee development
- Business travel between locations
- Management and administrative overhead
- Relocation or expansion costs
Not every category will apply in the same way to every GCC. The objective is to include the material costs associated with the proposed operating model.
Consider the cost of recruitment delays
A lower-cost location may take longer to supply experienced professionals.
If the centre cannot fill important positions on schedule, the company may need to extend recruitment, transfer employees from another location or delay the launch of a function.
These costs should be considered alongside the direct savings associated with office space or compensation.
Model different growth scenarios
Prepare at least three scenarios for the proposed centre.
A conservative scenario could assume slower recruitment, a base scenario could reflect the expected hiring plan, and an accelerated scenario could examine faster growth.
For each scenario, estimate the office capacity, recruitment requirements and operating costs.
This helps the company understand whether the location remains practical under different business conditions.
6. Decide Which Functions Should Move to a Secondary City
Not every GCC function needs to be distributed across multiple locations.
The company should identify which activities can operate effectively from a secondary centre and which depend on close interaction with the existing headquarters or primary GCC location.
Consider functions with clearly defined processes
Some teams may be easier to establish in a second location when their responsibilities, systems and performance expectations are well defined.
Examples could include selected business operations, software development teams, analytics functions or specialised support activities.
The suitability of each function depends on its complexity, security requirements, dependencies and level of interaction with other teams.
Assess knowledge transfer requirements
A new centre may need experienced employees from the existing GCC to establish processes, train new hires and maintain consistent standards.
Plan how knowledge will be transferred and how the teams will collaborate during the initial phase.
If the function relies heavily on informal communication or specialist knowledge held by a small group, establishing it in a second city may require more preparation.
Avoid splitting closely connected teams unnecessarily
Distributing employees across locations can introduce additional coordination requirements.
Teams that need frequent real-time collaboration may benefit from remaining together, depending on the work they perform.
Before dividing a function, identify its major dependencies and determine whether the proposed arrangement will support effective collaboration.
Give the secondary centre a clear mandate
The new location should have defined responsibilities, leadership and performance expectations.
It should not exist simply to accommodate surplus hiring or provide additional desks.
A clear mandate helps the centre establish its identity, attract suitable employees and demonstrate its contribution to the wider organisation.
7. Choose an Expansion Model That Matches Business Needs
A GCC can expand into a second city in several ways. The best option depends on the purpose of the expansion, the level of uncertainty and the amount of control the company requires.
Establish a small satellite team
A company may begin with a relatively small team that supports a specific function or talent requirement.
This approach allows the organisation to test the location before making a larger commitment.
The company should define what the pilot needs to demonstrate, including recruitment performance, operating readiness, employee retention and the ability to collaborate with the existing centre.
Create a specialised capability centre
A second location may be established to build expertise in a particular area.
For example, the centre could focus on a defined engineering discipline, analytics capability or another function that aligns with the local talent market.
This approach works best when the business has a clear reason to locate the capability there and can provide sufficient leadership and career opportunities.
Expand through a phased office commitment
A GCC may initially use a smaller office or flexible workspace and move to a larger dedicated facility as its requirements become clearer.
This can reduce the risk of committing to more space than the initial team needs.
However, the company should confirm that additional capacity is available and understand the commercial implications of changing its workplace arrangement.
Establish a permanent second centre
A permanent second centre may make sense when the company has a sustained requirement for a different talent pool or needs to distribute important operations across locations.
Before committing, the organisation should validate the business case, leadership structure, technology requirements and expected workforce scale.
The decision should reflect long-term operating needs rather than a short-term opportunity to reduce costs.
8. Manage Leadership, Communication and Coordination Across Cities
A multi-city GCC needs a consistent operating model.
Without clear responsibilities, teams may develop different processes, duplicate work or struggle to coordinate decisions.
Establish reporting relationships
Define who leads the secondary centre and how its leadership connects with the primary GCC and global headquarters.
Local leaders need sufficient authority to manage day-to-day operations while remaining aligned with enterprise policies and priorities.
The exact structure will depend on the centre’s size, mandate and level of independence.
Standardise essential processes
The company should identify which policies and procedures must remain consistent across locations.
These may include information security, HR processes, performance management, procurement and operational reporting.
Local adaptations may be necessary, but they should be documented and approved through the appropriate channels.
Create communication routines
Establish regular meetings and reporting mechanisms for teams working across cities.
The objective is to ensure that employees can share information, resolve dependencies and raise issues without excessive coordination overhead.
Communication practices should reflect the work being performed rather than rely on meetings for their own sake.
Avoid creating a secondary centre without leadership support
A small location can become operationally isolated if it lacks access to experienced leaders, decision-makers and professional development opportunities.
The company should plan how employees in the new centre will access expertise, participate in important projects and progress into leadership roles.
This helps ensure that the secondary location remains connected to the wider organisation.
9. Identify and Manage the Risks of Tier 2 Expansion
Expanding into a smaller city can provide opportunities, but the company should identify the risks before making a long-term commitment.
Talent depth may be limited
The available workforce may be sufficient for the initial team but less suitable for rapid expansion.
Mitigation measures include validating recruitment assumptions, building university relationships, investing in training and retaining the option to recruit from other locations.
Office supply may not match requirements
Suitable office space may be limited in certain locations or building categories.
The company should assess current supply, expansion options and alternative properties before committing to a specific site.
Infrastructure may vary by property
Internet availability, power reliability, building management and transport access can differ within the same city.
The company should evaluate the actual property and its surrounding infrastructure rather than rely on city-level assumptions.
Management complexity may increase
A second location introduces additional coordination and leadership requirements.
The business case should account for the resources needed to manage the centre and integrate it with existing operations.
Expansion assumptions may prove inaccurate
Hiring may be slower than expected, or the business may change its priorities.
A phased approach, clear decision points and regular reviews can help the company adjust its plans without making premature long-term commitments.
10. Build a Practical Tier 2 Expansion Roadmap
A structured roadmap helps the company move from location research to an operational decision.
Stage 1: Define the business requirement
Identify why the company needs another location and what the centre is expected to deliver.
Clarify the functions involved, the target workforce, the expected launch date and the business outcomes the expansion should support.
Stage 2: Shortlist potential cities
Compare cities against the same criteria, including talent availability, office supply, connectivity, costs and operational suitability.
Use evidence relevant to the proposed functions rather than general claims about a city’s attractiveness.
Stage 3: Validate the talent and property markets
Investigate recruitment capacity and confirm whether suitable office space is available.
Where possible, test the assumptions through recruitment activity, property visits and discussions with relevant local partners.
Stage 4: Build the financial and operating case
Estimate initial and ongoing costs, model different growth scenarios and identify the resources needed to establish the centre.
Define how the location will be managed and how its activities will connect with the existing GCC.
Stage 5: Launch in phases
Begin with a clearly defined team and mandate where a phased approach is appropriate.
Monitor recruitment, retention, operational readiness and collaboration with the existing centre.
Stage 6: Review before scaling
Use the results to determine whether the centre should expand, maintain its current scale or change its operating model.
The decision should be based on evidence about business performance and the location’s ability to meet future requirements.
Frequently Asked Questions
1. Why are GCCs considering Tier 2 cities in India?
Companies may consider these locations to access different talent pools, diversify operations and explore alternative cost structures. The business case depends on the availability of relevant skills, infrastructure, office space and the requirements of the proposed functions.
2. Which Tier 2 cities are suitable for GCC expansion?
Cities such as Coimbatore, Ahmedabad, Kochi, Jaipur, Indore and Bhubaneswar may be worth evaluating for selected functions. There is no universal ranking, and each location should be assessed against the company’s specific talent, infrastructure and operational needs.
3. Should a GCC establish a large office in a Tier 2 city immediately?
Not necessarily. A smaller initial team or phased workspace commitment may help the company validate recruitment and operational assumptions before expanding. The appropriate approach depends on the business requirement and the availability of suitable office capacity.
4. What should companies evaluate before selecting a Tier 2 location?
Key considerations include talent availability, recruitment timelines, employee retention, office supply, connectivity, technology infrastructure, total operating costs and access to relevant business ecosystems.
5. Can a Tier 2 city offer lower operating costs?
It may offer a different cost structure, but savings should not be assumed. Companies need to compare office costs, recruitment, compensation, travel, technology infrastructure and management overhead using consistent assumptions.
6. Which GCC functions can be located in a secondary city?
The answer depends on the function’s skills, processes, infrastructure requirements and interaction with other teams. Selected technology, analytics, engineering and business operations teams may be suitable, but each proposal requires its own assessment.
7. How can a company reduce the risks of expanding into a new city?
It can validate recruitment assumptions, assess office infrastructure, build a detailed financial model, define a clear operating mandate and expand in phases. Regular reviews help determine whether the location is meeting its objectives.
Final Thoughts
Tier 2 cities can offer additional options for GCCs seeking talent, operational diversity and long-term expansion opportunities. However, their suitability depends on the requirements of the business rather than their position on a list of emerging destinations.
A successful expansion begins with a clearly defined mandate. The company must then validate the local talent pool, assess office availability, compare total operating costs and establish how the new centre will work with existing teams.
A smaller initial commitment can help test assumptions before the company scales, while a clear leadership structure can prevent the secondary location from becoming operationally isolated.
The objective is not simply to move work away from a major metropolitan hub. It is to select a location that enables the GCC to deliver its intended outcomes and develop sustainably as business requirements change.
