Why Global Companies Are Hiring in Tier-2 India

For twenty years, "offshore to India" effectively meant "offshore to Bengaluru." That shorthand is now out of date, and the companies proving it are not scrappy startups chasing the cheapest rate — they are large enterprises building their own subsidiaries, which is the most conservative, most heavily due-diligenced way a company can commit to a location.

India's Global Capability Centre hiring is on track to cross 510,000 jobs in 2026, a 3.4-fold increase since 2021, across roughly 2,120 centres. Bengaluru still leads with about 30% of that hiring. But tier-2 cities are growing at 23% year-on-year — close to double the metro rate — and now account for around 15% of all GCC hiring.

This piece is about what that shift means for you as a buyer, whether or not you will ever build a capability centre yourself. We are E-Cybertech Solution, an STPI-registered software company in Jodhpur, Rajasthan — so we are on the tier-2 side of this argument. We have tried to be honest about where that side loses.

Three figures matter, and they point the same way.

Bengaluru is not shrinking — its share of hiring actually rose about 10% year-on-year, and it remains the single largest market by a wide margin. The story is not decline; it is that the growth rate has moved elsewhere. Tier-2 hiring is expanding at roughly twice the metro pace, from a smaller base.

The second figure is composition. Technology & software and BFSI together account for 56% of all GCC hiring — this is not back-office expansion, it is engineering. The third is intent: about 80% of capability centres launched in 2026 are "AI-first" in mandate, and 64% of new GCC roles require AI, data science or intelligent-automation skills. We will come back to why that changes what you should be buying.

The label is doing a lot of work, so it is worth pinning down. Tier-1 in this context means Bengaluru, Hyderabad, Pune, Delhi NCR, Mumbai and Chennai. Tier-2 is the next band: cities with real engineering colleges and established IT infrastructure, but without metro-scale competition for the same engineers.

The practical distinction is not population or glamour. It is how many employers are bidding for the same person. That single variable drives most of what follows.

This is the real case for tier-2, and it is not the one most agencies lead with.

In Bengaluru a developer can change employers without changing anything else about their life — same commute, same flat, same friends, often the same building complex. Competing offers arrive constantly and switching costs almost nothing. In a tier-2 city, leaving frequently means relocating, so people weigh it differently and stay longer.

Translate that into your engagement. At 20% attrition on a five-person team, you lose and replace roughly one person a year, every year. Each replacement costs you the notice period, the hiring gap, and then two to three months before the new engineer is genuinely productive in your codebase. At 10%, that event happens half as often.

The rate card is a number you negotiate once. Continuity is a cost you pay every single time it breaks — and it never appears on the invoice.

Two different comparisons get conflated constantly, and conflating them is how buyers end up disappointed.

If you are a company in the US, UK or Europe, moving your shortlist from Bengaluru to a tier-2 city does not double your savings. You already captured the big gap by coming to India at all. The tier-2 decision buys you something different: lower salary inflation pressure, less competitive poaching, and the retention profile above.

We are a tier-2 company, so treat this section as the one we had the most incentive to leave out.

If you need…	Where to go
Long-running product engineering, web and mobile, QA, data engineering, maintenance	Tier-2 is genuinely strong here. This is the bulk of commercial software work.
A niche skill at depth — specialised ML research, large-scale distributed systems, exotic stacks	Tier-1. The bench simply is not as deep, and you will wait.
To ramp 50 senior engineers inside one quarter	Tier-1. Absorption capacity at speed is a metro advantage.
Frequent in-person visits with short-notice international flights	Tier-1, usually. Most tier-2 cities need a domestic connection.
Continuity on a codebase over three to five years	Tier-2, on the attrition maths above.

The honest summary: tier-2 trades peak capability and ramp speed for stability and retention. Most companies buying offshore development need the second more than the first, but not all of them — and it is worth being clear-eyed about which one you are.

The most underrated statistic in the 2026 data: 64% of new GCC roles require AI, data science or intelligent-automation skills, and around 80% of centres launched this year are AI-first in mandate.

Enterprises are not opening Indian centres to get cheap hands on keyboards any more. That work is increasingly done by tooling. They are opening them to get people who can direct that tooling and be accountable for the output.

This has a direct consequence for how you evaluate a partner. The old question was throughput: how many developers, how fast, what rate. The useful question now is judgement: who reviews AI-generated code before it reaches your main branch, and what happens when it is subtly wrong. AI writes faster than humans can review — so as change volume rises, what you actually need more of is verification capacity, not typing capacity.

Any partner whose pitch is still purely "developer hours, low rate" is selling the thing that is falling in value. Our 30-point vetting checklist covers the questions that surface this, including several we would rather you did not ask us.

Rather than describe tier-2 in the abstract, here is one state's numbers — the state we operate in, so read it with that in mind.

Indicator	Figure
Software exports (STPI & SEZ units)	₹5,619 crore in FY 2024-25, per MeitY — among the fastest growth rates of any North Indian tier-2 state
State AI policy	Rajasthan AI-ML Policy 2026, launched in Jaipur in January 2026
Employment target	15 lakh jobs by March 2029 under the Rajasthan Employment Policy 2026
Innovation infrastructure	State innovation hubs in Jaipur, Jodhpur and Kota; Jaipur's Bhamashah Techno Hub supports 700+ startups across 150,000 sq ft
STPI presence in Jodhpur	Established 2005 with the Government of Rajasthan, providing single-window clearance for software exporters

Jaipur is repeatedly named among the fastest-rising GCC destinations. Jodhpur is smaller and earlier in that curve, with STPI infrastructure in place since 2005 and a state innovation hub. We have written a fuller local picture in our Jodhpur software development overview, and we also work from Jaipur.

Everything in our general vetting checklist still applies — repository ownership from day one, IP assignment signed by individual developers, a paid trial before commitment. Four questions are specific to tier-2:

Ask	What you are testing
"What was your actual attrition last year, and how many people left mid-project?"	The retention advantage is the entire argument for tier-2. If they cannot quote a number, they are not measuring the thing they are selling.
"Where do your engineers come from, and where do they go when they leave?"	A healthy tier-2 firm hires locally and loses people mostly to relocation, not to a competitor down the road. If everyone leaves for Bengaluru, you have metro attrition at tier-2 prices.
"Who reviews AI-generated code here, and what is the process?"	Given the AI-first shift, this separates a firm that has adapted from one still selling hours.
"How do you handle a client visit, and how long does it take to get here?"	Purely practical. Establish the travel reality before you need it, not after.

If you want the country-level view instead — time-zone overlap, contracts, VAT and data protection by market — our guides start at outsourcing to India, with market-specific pages for the USA, the UK and across Europe.