OPINION | Budget 2026 can unlock the next wave of GCCs from Bharat’s Tier II cities

GCC

India has emerged as the world’s foremost hub for Global Capability Centres (GCCs), with nearly 1,800 GCCs employing close to two million professionals and generating around 65 billion dollars in annual revenue. These centres now lead global transformation in AI, cloud engineering, cybersecurity, digital product development, and analytics. Revenues are projected to reach 100 billion dollars by 2030.

The next phase of this growth, however, cannot rely solely on India’s metros. Bengaluru, Hyderabad, Pune, Chennai, Mumbai, and NCR are experiencing rising congestion, real estate inflation, and increasing competition for specialised talent. Tier II India is where the next wave of capability expansion must take place. These cities represent the real economic geography of Bharat and must be placed at the centre of policy planning in Budget 2026.

More than 65 percent of India’s engineering and management graduates emerge from Tier II and Tier III cities. Corporate experience also shows that talent retention and productivity often improve in these locations due to better affordability and quality of life. Nearly 150 GCCs already operate outside metros, and industry analyses suggest 30 to 40 percent of future GCC growth will likely occur in these emerging centres. For India to scale sustainably, the next leap must be from Bharat’s Tier II cities.

Budget 2026 presents a timely opportunity to drive this transition deliberately and accelerate the emergence of Tier II India as a global capability corridor.

Tier II cities now offer essential advantages: lower operating costs, expanding infrastructure, growing air connectivity, and deeper talent pools. Operating cost differences between metros and Tier II cities range from 25 to 40 percent. Attrition is significantly lower. Commute times are manageable, and quality of life is improving steadily.

Cities such as Indore, Ahmedabad, Lucknow, Coimbatore, Jaipur, Bhubaneswar, Kochi, and Visakhapatnam are investing in urban infrastructure, skill development, and technology ecosystems. These cities are not attempting to mimic metros; instead, they are building clean, sustainable, and efficient business ecosystems.

This shift aligns with Bharat First thinking. Balanced growth strengthens national resilience and ensures that opportunity is not concentrated in a few districts but spread across the country.

Indore has already attracted around ₹5,700 crore in GCC and technology investments. The state has introduced a focused GCC policy that offers capital subsidies of up to 40 percent and support for training and compliance. Indore consistently ranks among India’s best-governed and cleanest cities. Its civic systems, power reliability, and air connectivity make it one of India’s most investable Tier II markets.

Private developers have started constructing Grade A IT infrastructure, demonstrating that when government policy and private investment align, Tier II cities can quickly become viable alternatives for global corporations. Indore represents what many Tier II cities can achieve with the right support.

Budget 2026 must enable a structural shift rather than incremental improvements. Several targeted interventions can help.

A national mission can identify 20 to 25 Tier II cities as GCC Priority Nodes. Objective benchmarks on infrastructure readiness, digital connectivity, talent supply, and governance can give global enterprises clarity and reduce evaluation risk. Aligning central and state frameworks under a single mission will streamline execution.

GCCs typically require ready-to-operate Grade A infrastructure before committing to a new city. Budget 2026 can provide capital support, interest subvention, and tax incentives for private development of IT parks and innovation districts across Tier II India. This will accelerate the availability of high-quality workspace and improve investor confidence.

GCCs increasingly seek advanced talent in AI, cloud, cybersecurity, data engineering, and domain-specific skills. Budget 2026 can create a dedicated talent fund to support curriculum upgrades, lab infrastructure, research programmes, and faculty development in Tier II colleges. Local talent pipelines are essential for companies evaluating these cities.

Budget 2026 can include incentives such as accelerated depreciation, tax credits tied to job creation in non-metro districts, and GST benefits for units in designated GCC zones. Even a short, well-defined tax benefit period can alter global site selection outcomes.

Connectivity and urban reliability strongly influence GCC decisions. Budget 2026 can allocate funds for airport expansions, smart mobility, fibre networks, waste management systems, and public transport in identified Tier II hubs. Infrastructure must stay ahead of demand, not respond after saturation.

Budget 2026 can outline a policy framework for mixed-use innovation districts that combine offices, co-working, training facilities, housing, and recreation. These integrated clusters create ecosystems that allow GCCs to scale quickly and attract talent.

A distributed GCC ecosystem supports India’s long-term competitiveness. Every GCC job creates three to five indirect jobs in housing, hospitality, transport, education, and services. Tier II GCC growth reduces migration pressure on metros and energises local economies. It creates a more resilient national workforce and expands India’s global capability footprint.

If India is to reach its five trillion-dollar aspiration and position itself as the digital capability engine of the world, GCC growth must move beyond metros into the heart of Bharat.

Budget 2026 can become the moment that unlocks this shift.

If the Union Budget provides the necessary clarity and incentives, global boardrooms evaluating their next capability centre will no longer limit their choices to Bengaluru, Hyderabad, or Pune. They will look seriously at Indore, Ahmedabad, Coimbatore, Jaipur, and other Tier II cities poised for transformation.

Budget 2026 can shape the next decade of India’s capability landscape and ensure that the world’s future GCCs rise from the centres of Bharat. This is the opportunity to build a distributed, innovation-driven, and resilient economic model for the country.