In the new emerging India, while the Tier I cities are dwindling under the burden of poor infrastructure, rapidly increasing operating costs, higher cost of living, high attrition, etc., the tier II and tier III cities have remained an untapped asset of the country for long.

In a recent study of Top 10 emerging business destinations in India, conducted by Cushman & Wakefield, global real estate solution providers, the tier II and tier III cities pose cost advantages, lesser salary expectations, lesser price fluctuations, lesser attrition and high quality of life for the residents.  The study identifies the cities of Ahmedabad, Bhubaneswar, Chandigarh, Coimbatore, Jaipur, Kochi, Indore, Nagpur, Vadodara and Visakhapatnam as the top 10 emerging cities of India.  Tier II cities like Ahmadabad, Kanpur, Chandigarh, Patna, Dehradun, Pondicherry, Pune etc have a population of around one million, whereas minor cities with population less than one million like Madurai, Baroda, Nashik and Trichy are termed as Tier III cities.

A significant portion of installed talent pool in Tier I cities hails from Tier II and Tier III cities.  Given the opportunity,  that talent wants to live closer to home in Tier II and Tier III cities.

Whether it’s banks, BPO’s, cinemas, FM stations, electronic companies like Lenovo, Nikon India, and Sony India; everyone is looking towards these smaller cities for talent. Even in case of design, cities like Ahmedabad and Pune with their multitude design centers and institutes point towards the availability of skilled design talent in these cities. In smaller cities like Mysore and Mangalore where less rentals are complimented with good infrastructure, even pre-schools have been growing at an incredible 120% per annum. Chandigarh, Coimbatore, Vadodara, Jamshedpur have become the hub of e-commerce and feature as the top four small cities for online shopping. Towns of Gujarat like Ahmedabad, Surat and Vadodara have made huge progress industrially. An encouragement is being showered for air travel between these tier cities and efforts are in progress on getting them on the aviation map.

Cost of Living

Cost of living in Tier II and Tier III cities is 25-50% lower compared to Tier 1 Cities.

Cost of Real Estate

Tier II and Tier III cities provide cost advantage of 15-60% in real estate cost.

The overcrowding in Tier I cities is making Tier II and Tier III cities with open spaces, wider infrastructure, and nature-friendly ways more desirable for the people.

Attrition in Tier-II cities is much lower than Tier I  cities due to lack of competition and unwillingness of people to migrate to Tier I cities

Many tier II and Tier III cities are home to many prominent universities and research labs.