Large Indian companies have invested in Tier 3 cities such as Bhuvaneswar and Trivandrum over the last 10 years. The growth rate in these cities was slow compared to the larger cities. The reasons were primarily due to difficulty in attracting talent and the lack of infrastructure. The ecosystem in some of these cities has matured to a level where faster growth is possible. The physical and social infrastructure has improved significantly and so is the size of talent pool that is willing to move back to their home towns.
Over the next five years, the large MNCs and Indian companies will be fighting the talent war in Tier 3 cities. This will further push India’s IT boom and help maintain India’s cost competitiveness when compared to emerging countries such as China, Vietnam and Latin American countries.
The cities to watch out for will be Nagpur, Chandigarh, Trivandrum, Mysore and Cochin.
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