India’s Global Capability Centre (GCC) ecosystem has traditionally concentrated on major metropolitan hubs such as Bengaluru, Hyderabad, Pune, Chennai, Mumbai and Delhi NCR. These cities offer established professional networks, large talent pools and mature commercial office markets.
However, as companies expand their Indian operations, some are also evaluating smaller cities. Locations such as Kolkata, Jaipur, Coimbatore and Ahmedabad may offer access to different talent pools, opportunities to diversify operations and potentially lower occupancy costs.
The question is whether these advantages outweigh the challenges of building and scaling a GCC outside an established hub.
The answer depends on the centre’s functions, hiring requirements, infrastructure needs and long-term growth plans. A Tier II city may be suitable for a particular operation, but it should not be selected simply because it appears less expensive.
For a broader comparison of India’s established GCC destinations, read Best Cities in India to Set Up a GCC: A Comparative Guide.
Why Are Companies Considering Tier II Cities for GCCs?
The expansion of GCCs beyond traditional metropolitan hubs reflects a broader shift in location strategy. Companies are increasingly evaluating where specific functions can be delivered effectively, rather than assuming that every team must be based in the same city.
Several factors are contributing to this interest.
Access to additional talent pools
Establishing operations in a new city can help companies reach professionals who may not be part of their existing recruitment networks. Local universities, technical institutions and industry clusters can also provide talent for selected roles.
However, the availability of graduates does not automatically guarantee access to experienced specialists or senior leadership. Companies must evaluate the talent pool for the exact roles they intend to recruit.
Potential cost advantages
Some Tier II locations may offer lower office occupancy costs or differences in employee compensation and living expenses compared with major metropolitan markets.
These potential savings should be assessed carefully. A lower office rent may not translate into a lower total operating cost if the company has to recruit from other cities, relocate employees or invest more heavily in training.
Geographic diversification
A company with an established GCC in Bengaluru or Hyderabad may consider a second location to expand recruitment options, distribute selected functions or provide additional operational capacity.
A multi-city strategy can reduce dependence on a single talent market. However, it can also increase management complexity, travel requirements and coordination costs.
For an overview of the forces shaping the market, see GCC Trends in India 2026: Market Size, Hiring, Expansion and Office Demand.
Can Kolkata Compete as a GCC Destination?
Kolkata may be worth evaluating for selected technology operations, business services, finance-related functions and other roles where the required workforce is available.
Companies considering the city should assess its professional talent pool, educational ecosystem, commercial office supply, connectivity and the availability of specialist service providers.
Kolkata may be relevant for a company that can recruit its required workforce locally and does not depend on a very large concentration of highly specialised talent. However, businesses planning advanced AI research, niche technology development or a large specialist engineering team should validate recruitment feasibility before making a commitment.
What should companies evaluate in Kolkata?
- Availability of experienced professionals for the intended functions
- Recruitment timelines and compensation expectations
- Suitable commercial office buildings and workplace options
- Employee commute patterns and transport connectivity
- Access to technology vendors and professional services
- The city’s ability to support future headcount growth
The decision should be based on evidence from the company’s recruitment and real estate assessments, rather than general assumptions about the city’s cost structure.
Is Ahmedabad Suitable for GCCs?
Ahmedabad offers an industrial and business environment that may be relevant for selected corporate operations, engineering-related functions and manufacturing support.
Companies evaluating the city should consider whether its professional ecosystem aligns with their specific GCC mandate. The availability of suitable talent, supporting industries and commercial office infrastructure will influence its suitability.
Ahmedabad may be worth shortlisting for businesses that need to support industrial or engineering-related activities. However, companies should validate the depth of specialist talent and the scalability of their preferred location before proceeding.
What should companies assess?
- Access to engineering and industry-related talent
- Availability of professionals for corporate and technology functions
- Quality and suitability of commercial office space
- Connectivity for employees and business stakeholders
- Local vendor and professional services networks
- Potential to expand the centre over time
A city-level assessment should be followed by a more detailed comparison of individual business districts and buildings.
Can Coimbatore Support a GCC?
Coimbatore may be relevant for selected engineering, industrial technology and technical support functions. Its suitability will depend on the specialisations required and the scale at which the company intends to operate.
A business establishing a focused technical team may have different requirements from a multinational company planning a large, multidisciplinary centre.
Companies should therefore examine the local talent pipeline, the availability of experienced professionals, supporting infrastructure and the city’s ability to accommodate future expansion.
Questions to ask before selecting Coimbatore
- Are the required engineering and technical skills available locally?
- Can the company recruit the necessary number of employees within its planned timeline?
- Are suitable office premises available for the team’s infrastructure and security needs?
- Can the local ecosystem support the centre as its responsibilities expand?
- Will the location remain practical if the company needs to recruit additional specialists?
If the centre’s requirements align with the available talent and infrastructure, Coimbatore may be worth evaluating as part of a broader location strategy.
Is Jaipur a Viable GCC Location?
Jaipur is another emerging location that companies may consider when evaluating options beyond India’s largest GCC hubs.
Its suitability will depend on the centre’s functional requirements, recruitment needs and the availability of appropriate commercial office space. Companies should investigate the local talent pool rather than assuming that the city can support every type of GCC operation.
Jaipur may be worth evaluating for selected business support, technology and operational functions where recruitment can be supported locally. More specialised operations may require a deeper assessment of the availability of experienced professionals and relevant industry networks.
Before selecting Jaipur, companies should assess the practicalities of recruitment, connectivity, workplace infrastructure and future growth.
Tier I vs Tier II Cities: Which Offers Better Value?
There is no universal answer. Established metropolitan hubs generally provide more mature GCC ecosystems and broader professional networks, while emerging cities may provide access to additional talent pools and different cost structures.
| Decision factor | Established Tier I hubs | Emerging Tier II locations |
| GCC ecosystem | Generally more mature | Developing at different rates |
| Specialist talent | Broader talent pools in many established functions | Depends on the city and specialisation |
| Recruitment | Established hiring networks, with competition for skills | May require more targeted recruitment |
| Office supply | Multiple established commercial districts | Supply and building specifications vary |
| Occupancy costs | Vary by city and micro-market | May be lower for selected properties |
| Industry networks | Often extensive | May be strong in specific sectors |
| Expansion | Depends on talent and office availability | Depends on local ecosystem and infrastructure |
| Geographic diversification | Can serve as primary hubs | Can complement established hubs |
Any cost comparison should account for more than rent. Employee compensation, recruitment expenses, relocation, infrastructure, technology, travel and management overheads all influence the total cost of operating a GCC.
Should a GCC Use a Hub-and-Spoke Model?
Companies do not always have to choose between establishing an entire GCC in a major city and moving all operations to a smaller market.
A hub-and-spoke model allows a company to retain a primary centre in an established location while using a secondary city for selected functions or additional capacity.
For example, a company may maintain leadership and specialist teams in Bengaluru or Hyderabad while evaluating another city for roles that can be recruited and managed effectively there.
Potential benefits include:
- Access to a broader range of talent markets
- Additional options for future recruitment
- Greater geographic diversification
- Flexibility in allocating selected functions across locations
However, a multi-city model also introduces additional coordination, travel, technology and management requirements. The company should establish clear reporting lines and operating responsibilities before distributing teams across locations.
For companies comparing established hubs, Bengaluru vs Hyderabad vs Pune: Which GCC Location Offers the Best Value? provides a starting point for evaluating the differences between three major markets.
How Should Companies Evaluate a Tier II GCC Location?
A structured assessment can help businesses compare potential locations without relying on broad assumptions.
1. Define the GCC’s mandate
Identify the functions, skills and capabilities the centre will manage. A technology research centre may have very different location requirements from a finance operations team.
2. Validate the talent pool
Assess the availability of professionals by role, experience and specialisation. Estimate hiring timelines and compensation requirements.
3. Calculate total operating costs
Include payroll, office occupancy, technology, recruitment, relocation, administration and other recurring expenses.
4. Assess infrastructure
Evaluate connectivity, power reliability, commercial office supply, employee commute options and the infrastructure required for the centre’s operations.
5. Compare workplace models
Consider traditional leases, managed offices and flexible workspaces according to headcount, security requirements, customisation needs and the expected timeline.
6. Test scalability
Determine whether the city can support future recruitment and whether suitable office space will be available as the centre grows.
7. Compare the location against alternatives
Use consistent assumptions across all shortlisted cities. This makes it easier to understand whether a location offers a genuine operational advantage.
For the broader setup process, consult The Complete Guide to Setting Up a Global Capability Center in India.
Frequently Asked Questions
Are Tier II cities suitable for GCCs?
Some Tier II cities may be suitable for selected GCC functions. Companies should assess talent availability, office infrastructure, operating costs and scalability before making a decision.
Which Tier II cities should companies evaluate for a GCC?
Kolkata, Jaipur, Coimbatore and Ahmedabad are among the cities businesses may investigate, depending on their sector, recruitment requirements and operating model. Other emerging locations may also be relevant.
Are Tier II cities always cheaper than Tier I cities?
No. Some costs may be lower, but the overall financial benefit depends on salaries, recruitment, relocation, office occupancy, infrastructure and management requirements.
Should a company establish its entire GCC in a Tier II city?
That depends on the centre’s mandate and the local ecosystem. Some operations may work well in a single emerging location, while others may benefit from a hub-and-spoke model.
What is the biggest risk when selecting a Tier II city?
A key risk is choosing a location based on assumed cost savings without verifying whether the required talent, infrastructure and office space are available.
Conclusion
Tier II cities can form part of India’s evolving GCC landscape, but they are not automatic substitutes for established metropolitan hubs.
Kolkata, Jaipur, Coimbatore and Ahmedabad each warrant evaluation against the requirements of a specific business. The strongest location is the one that can support recruitment, operational performance and long-term expansion at a sustainable total cost.
For companies planning a new GCC, the next step is to define the centre’s mandate, validate the talent market and compare office options before committing to a location.
Planning a GCC in India? Explore Flexo’s resources on location selection, operating models and workplace planning to support your decision.
