The Next Frontier: Tier-2 & Tier-3 Cities as Growth Catalysts for Emerging GCCs

SRKGC Boardroom Edition | December 2025

SRKGamechangers | Empowering Global Capability Centres of the Future

Leadership Quote

“The next wave of GCC success will come from those who see beyond metros — and invest where India’s future is unfolding.”— Ramma ShivKumar, Founder, SRKGamechangers

Executive Summary

India’s Global Capability Center (GCC) story is evolving. While Tier-1 metros like Bengaluru, Pune, Hyderabad, and Chennai built the foundation, a new growth wave is emerging from Tier-2 and Tier-3 cities — Coimbatore, Kochi, Indore, Mohali, and Bhubaneswar.

This transition is not merely a cost play — it represents a strategic decentralization of capability, innovation, and leadership.These smaller cities are now powering India’s next phase of digital, manufacturing, and service excellence, driven by policy incentives, skilled local talent, and maturing infrastructure.

The next decade of India’s GCC expansion will be defined not by geography, but by bold leadership willing to decentralize growth.

1. Why Tier-2 & Tier-3 Cities Matter

The case for expanding GCC footprints into Tier-2 and Tier-3 cities is compelling:

• Talent Decentralization: India’s engineering and data-science workforce is no longer metro-bound.

• Cost Advantage: 20–30% lower salary costs and up to 50% lower facility costs than metros.

• Infrastructure & Policy Support: Smart City and state IT policies accelerating growth.

• Quality of Life: Better retention through improved living standards and shorter commutes.

Strategic Insight:Tier-2 GCCs achieve 25–35% stronger cost-to-value ratios, making them sustainable hubs for innovation and transformation.

2. What These Cities Offer Beyond Cost

Strategic Advantage	Description	Example
Loyal Talent Pools	Local graduates seeking stable careers close to home	Kochi’s analytics and data engineering workforce
Engineering Depth	Regional strength in manufacturing and product design	Coimbatore’s precision and product-engineering ecosystem
Resilience	Multi-location diversification reducing risk concentration	Bhubaneswar-based BFSI GCC operations
Innovation Ecosystem	Partnerships with universities and state innovation parks	Kerala Startup Mission and T-Hub models

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3.Leadership & Governance Imperatives

The success of a Tier-2 or Tier-3 GCC depends on leadership maturity and governance agility.

Small and mid-sized centers thrive when empowered leaders operate with autonomy and purpose.

Leadership Imperatives:

• Empower local leaders with decision-making rights and P&L ownership.

• Create career mobility through cross-hub rotations.

• Build a sense of community and belonging via local engagement.

• Partner with universities and skill clusters for sustainable talent pipelines.

Leadership Insight:

“A Tier-2 GCC thrives not on oversight — but on ownership.”ot a compromise — it’s a catalyst for sustainable scale.”

4. Case Study: Colruyt Group – Coimbatore GCC

Background:European retail major Colruyt Group expanded its India footprint by opening a GCC in Coimbatore to complement its Hyderabad center.

Why Coimbatore:

• Deep engineering talent and strong academic network.

• Industrial heritage supporting manufacturing-tech integration.

• Supportive state ecosystem for digital operations.

Impact:

• Delivered high-value IT and analytics projects from Coimbatore.

• Demonstrated that advanced product engineering can thrive outside metros.

• Helped the group diversify operations for business continuity.

Lesson:

Coimbatore’s success story proves that India’s innovation geography is expanding, and smaller cities can own complex, global mandates.

5. The SRKGC Playbook: Scaling in Tier-2/3 Cities

Phase	Strategic Actions	Success Enablers
Phase 1: Validate & Pilot	Identify city clusters, launch 20–50 member pilot teams	Local partnerships, digital infra readiness
Phase 2: Build Capability & Culture	Empower site leadership, invest in skilling and collaboration	CoEs, university partnerships
Phase 3: Scale & Integrate	Expand to product engineering, data science, and AI	Global process integration, cross-GCC rotations

SRKGC’s experience shows that scaling outside metros requires a blend of talent strategy, local leade

6. Challenges & Mitigation Strategies

Challenge	Mitigation
Infrastructure gaps	Hybrid work models, government collaboration
Leadership pipeline	Local talent grooming + global mentorship
Ecosystem maturity	Early vendor alliances and shared innovation hubs
Perception bias	Showcase success stories, transparent reporting

“Challenges exist — but so do bold leaders ready to reimagine geography.”rip, an

7. The Leadership Imperative — A Call for Bold Decentralization

The next phase of GCC evolution will not be confined to traditional metro clusters.Leaders who decentralize growth will unlock access to new talent, cost advantage, and innovation potential.

“The next decade of GCC evolution will be defined by how courageously leaders decentralize — empowering new cities, new talent, and new possibilities.”— Ramma Shiv Kumar

8. SRKGC Perspective

At SRKGamechangers, we enable organizations to design lean, scalable, and innovation-led GCCs in India’s emerging cities.

Our strategic offerings include:

• End-to-end GCC setup and location strategy

• Leadership and governance design for local autonomy

• Innovation and AI lab strategy for digital transformation

• Advisory for mid-market and PE-backed companies expanding into India
  

“SRKGC partners with forward-thinking leaders who see Tier-2 not as a fall-back — but as the future.”

As India’s growth story expands beyond its metros, it’s time for leaders, policymakers, and industry stakeholders to collaboratively shape the Tier-2 and Tier-3 GCC ecosystem. Let’s come together to exchange insights, share success stories, and identify enablers that can accelerate inclusive growth across these rising hubs. I invite fellow professionals, investors, and innovators to join the conversation — to explore how we can transform emerging cities into next-generation talent and technology powerhouses that redefine India’s global capability landscape.