In 2025 the Global Capability Centers (GCCs) in India are increasingly moving away from congested Tier-1 cities like Bengaluru and Gurugram to bustling Tier-2 cities like Coimbatore, Jaipur, and Lucknow. This business transformation and finance transformation-driven strategic shift utilizes business advisory services and international business solutions to maximize cost, talent, and innovation.
Based on NASSCOM’s 2025 GCC Report, EY’s 2023 trends, and recent trends, this blog discovers seven astounding reasons for this migration, along with stats, case studies, and IT business solutions to enhance SEO and engagement.
1. Cost Optimization Without Compromise
The Tier 2 cities have 30-40% lower cost of the operations than Tier-1 cities as per the EY’s report in 2023. Office rentals and wages of employees are much lower, allowing finance transformation. NASSCOM points out that Tier-2 GCCs save 25% on infrastructure expenses.
Strategies:
- Rent low-cost office spaces.
- Apply business consulting services for planning the budget.
- Apply IT business solutions for remote operations.
Case Study:
TCS (Tata Consultancy Services) a GCC in Indore cut operational expenditures by 20% through business solutions while achieving output equivalence with its Bengaluru hub.
2. Access to Diversified Talent Pools
Tier-2 cities have more than 82,000 GCC professionals, generating diversified talent pipelines, according to Zinnov’s 2025 report. Chandigarh and Kochi have skilled engineers and data scientists, 15% more retained compared to Tier-1 hubs.
Actions:
- Collaborate with business consultants to access local universities.
- Employ AI-based hiring through IT business solutions.
- Provide remote training initiatives.
Case Study:
Genpact’s Jaipur delivery center sources local talent, reducing dependency on Tier-1 migration and achieving 90% employee retention, thanks to targeted talent engagement programs.
Table: Comparison of Talent Metrics
| City Type | Talent Retention | Hiring Cost (USD) | Skill Availability |
|---|---|---|---|
| Tier-1 (e.g., Bengaluru) | 75% | $10,000 | High |
| Tier-2 (e.g., Jaipur) | 90% | $6,000 | Moderate-High |
3. Enhanced Infrastructure and Connectivity
Tier-2 cities have undergone enormous infrastructure development, with 70% of GCCs attributing enhanced digital connectivity as a main driver, according to NASSCOM 2025. Coimbatore and Lucknow now compete with Tier-1 cities in terms of broadband and transport.
Steps:
- Utilize global business solutions for cloud infrastructure.
- Partner with advisory services for logistics planning.
- Invest in intelligent office configurations.
Case Study:
HCLTech, a GCC in Bhubaneswar employed business advisory services to adopt 5G-powered operations, with productivity enhanced by 18%.
4. Improved Work-Life Balance for Staff
Tier-2 cities have higher standards of living with shorter commutes and lower costs of living, according to Inductus 2024. Employees experience 20% improved job satisfaction, decreasing attrition.
Moves:
- Encourage flexible work with IT business solutions.
- Provide housing subsidies through business consulting services.
- Develop community engagement initiatives.
Case Study:
A Jaipur GCC, Metacube operating as a software company recorded 12% reduced turnover following the introduction of well-being activities with business consultancy.
5. Government Support and Incentives
State governments in Tier-2 cities offer tax incentives and subsidies, with 60% of GCCs taking advantage of payroll incentives, according to HSBC’s 2025 report. This promotes business change.
Activities:
- Hire business consultants for policy guidance.
- Apply for operating subsidies.
- Utilize advisory services for compliance.
Example:
Mphasis a GCC in Mangalore achieved 15% cost savings through state grants, with business solutions as the guide.
6. Scalable Innovation Hubs
Tier-2 cities are becoming innovation clusters, with 7% of GCCs there in FY2024, up from 5% in FY2019, according to TechCircle 2025. They facilitate AI and cybersecurity R&D.
Strategies:
- Construct R&D facilities with global business solutions.
- Employ business advisory services for tech collaborations.
- Recruit niche talent through IT business solutions.
Case Study:
UST Kochi GCC built an AI platform with advisory services, reducing R&D expenses by 10%.
7. Lower Competition for Talent
Tier-2 cities experience less talent poaching and 25% less competition than Tier-1 cities, according to WiseMonk 2025. This provides stable teams to GCCs.
Steps:
- Employ predictive analytics for retention, through business consulting services.
- Provide competitive benefits with business advisory.
- Have mentorship programs in place.
Case Study:
For instance, an IBM GCC in Ahmedabad retained 95% of its employees through business solutions for customized career paths.
Why This Shift Matters
The shift of GCCs to Tier-2 cities is a game-changer, accelerating business transformation through cost reduction, access to talent, and innovation. Global business solutions providers such as ABSL enable GCCs with IT business solutions and advisory services, supporting scalability and success in 2025’s competitive environment.
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