Tier‑2 talent vs supply gaps
Talent is decentralising — around 24–26% of India’s IT/ITeS roles are now in tier‑2 cities — but those ecosystems still face supply‑chain fragility and weaker logistics, which makes scaling product‑heavy startups harder outside metros. Commenters pointed to local disparities: growing local tech talent but nascent supply and distribution networks. (x.com)
India’s tech hiring map is spreading beyond the big metros, but the harder part of building outside them is still moving goods, not writing code. (foundit.in) In July 2025, foundit said a group of tier-2 cities — Kochi, Coimbatore, Ahmedabad, Indore and Jaipur — posted 21% year-on-year growth in Global Capability Centre hiring, while Bengaluru still held 35% of those roles. (foundit.in) Zinnov said India’s tier-2 and emerging cities hosted more than 215 Global Capability Centre units in financial year 2023, up from more than 170 in financial year 2021, with an 11% compound annual growth rate that matched tier-1 cities. (zinnov.com) Those centres are mostly expanding in software, finance, research and other work that can be delivered over broadband, not by trucking parts across states. NASSCOM’s 2024 Global Capability Centre report said Jaipur and Coimbatore were gaining because tier-1 costs were rising, but it also flagged infrastructure gaps in those newer hubs. (community.nasscom.in) That split helps explain why service-heavy employers can decentralise faster than product-heavy startups. A software team can hire in Indore or Kochi once it has power, internet and managers; a hardware or consumer brand also needs warehousing, suppliers, repair networks and predictable delivery times. (community.nasscom.in) India has been upgrading the national backbone for that second problem. The India Brand Equity Foundation said in May 2024 that the country had risen to 38th out of 139 economies in the World Bank’s Logistics Performance Index over the previous five years, while the government kept pushing the National Logistics Policy and freight-corridor projects. (ibef.org) But the same policy push shows the gap is not closed. Invest India said in June 2025 that tier-2 and tier-3 cities account for 51% of India’s registered micro, small and medium enterprises, and that better infrastructure and connectivity are still needed to optimise supply chains in those places. (investindia.gov.in) The government has also changed how it talks about logistics costs. In September 2025, the commerce ministry said the long-cited 13% to 14% of gross domestic product figure came from outside estimates, and released a new NCAER-DPIIT assessment that put India’s logistics cost at 7.97% of gross domestic product for 2023-24. (pib.gov.in) That national average does not erase local bottlenecks. Zinnov’s tier-2 analysis ranks cities not just on talent, but also on ecosystem favourability, connectivity to hub cities, business environment and climate vulnerability — a sign that companies choosing Mysuru, Coimbatore or Jaipur are still buying into very different operating conditions. (zinnov.com) The result is a two-speed map: talent is dispersing, especially for digital work, while supply and distribution still cluster where roads, airports, vendors and warehouses are thickest. Until those networks deepen city by city, India’s smaller tech hubs will keep producing more engineers than product corridors. (foundit.in)
