The Rise of Tier-2 Cities in India's Job Market: Why They're Outpacing Metros
Hiring in Tier-2 and Tier-3 cities has increased to 20% compared to 14% in metros. Hiring activity is at its highest in IT/ITeS, BFSI, logistics, advanced manufacturing, and newer technologies such as Artificial Intelligence (AI), data, and cybersecurity (as well as electric vehicles (EVs)). The three key drivers or “engines” for job growth over the next five years will be:
Enterprise Expansion (GCC’s and digital services) Manufacturing and Supply Chain (PLI, corridors, and logistics parks) Skills and Entrepreneurship (Skill India/PMKVY, Startup India, and Seed Funding)
The “Best Tier-2 Cities” Where Job Opportunities Are Rising Fast
Lucknow is turning into a tech talent pipeline of backend developers, AI engineers, business analysts, and customer operations, all driven by rising startups. Coimbatore of Tamil Nadu is scaling EV manufacturing and software engineering through expanding IT parks. In the next five years, there will be increased employment opportunities in aerospace, electronics, machinery, and MSME Supplier ecosystems; this includes mechanical and electrical engineers, CNC operators, Quality Assurance Professionals, Embedded Systems Engineers, and Supply Chain Professionals. Surat and Vadodara are growing as manufacturing and logistics hubs due to growing industrial zones. The corridor between Ahmedabad and Gandhinagar is also experiencing rapid job growth across the BFSI (Banking Financial Services and Insurance), Fintech, Analytics, Compliance, Global Services sectors of the economy because of the growth of the GIFT City International Financial Services Centre or IFSC. The biggest transformation can be seen in Visakhapatnam. Google’s $15 billion AI hub investment will include gigawatt-scale data centers, subsea cable landings, and renewable energy integration, creating 25,000 to 35,000 jobs in data engineering, cloud infrastructure, cybersecurity, and AI research. Indore, a rapidly growing city, is becoming a balanced center for IT and industrial activity with its Smart City upgrades and new corridor development. With a highly skilled population and cost-efficient business operations, Indore will continue to grow and thrive as a hub for IT, Business Process Outsourcing, and other private-sector employers in the next five years. The expansion of the information technology and IT-enabled service industries in Jaipur and the spillover into manufacturing and logistics sectors, as well as connectivity improvements and the establishment of industrial areas and logistics infrastructures, are starting to provide Jaipur with corporate and supply chain jobs. The future of IT services, manufacturing support, logistics, and corporate operations in Jaipur will continue to expand. Kochi’s IT ecosystem is growing quickly, with Infopark expanding its facilities and new technology campuses being built. The metro and transportation improvements to the area are providing better access to existing and future technology campuses in Kochi. The improved access has helped to increase the number of Global Capability Centres (GCCs) that are expanding into Kochi. 5-Year Outlook for Kochi: Expected to see a continued increase in hiring for IT services, GCCs, AI, Cybersecurity, Product Engineering, and Supporting services. Bhubaneswar’s IT ecosystem consists of an increasing number of IT Parks with a strong focus on skills development through Centres of Excellence at various ITIs that offer training in Robotics, Electric Vehicle Technology, AI, CNC operations, etc. The combination of the growing number of IT parks and a strong focus on the development of a skilled workforce creates significant opportunities for employers to access an industry-ready workforce for their operations. 5-Year Outlook for Bhubaneswar: A growth in placements for graduates and increased opportunities in the Manufacturing, Electric Vehicle (EVs), Automation, Electronics, and IT support services space. Central to central India, Nagpur is situated in a key logistics and transport hub with significant investments in the construction of logistics parks and warehouses supporting increased efficiencies in both operational and technology-based logistics functions. Over the next five years, employment across blue-collar and white-collar occupations related to transportation planning, inventory management, data analysis, and compliance will continue to grow.
Government Schemes Boost Jobs in Tier-2 Cities
1) Skill & Employability Engine
Skill India Programme (includes PMKVY 4.0 + Apprenticeship promotion + JSS): a consolidated push (approved for 2022–23 to 2025–26) for training, upskilling, and employability critical for Tier-2 job expansion. Skill India Digital Hub (SIDH): supports digital/industry-relevant courses at scale. Why it matters for the next 5 years: companies expand faster where the “skills pipeline” is visible, especially for AI, EV, robotics, CNC, cyber, analytics, etc. (many states now align training to local industry demand).
2) Manufacturing/Supply Chain Engine
Government updates on PLI (Production Linked Incentive) schemes across 14 sectors show large investments, job creation, and sector-specific successes (electronics manufacturing) have created large numbers of jobs and export growth given by the industrialized Tier-2 clusters. As the supplier ecosystems grow around the plants/parks, the Tier-2 cities will have job opportunities not just within factories, but in the supply chain ecosystems of Quality, Procurement, Maintenance, Warehousing, IT Systems, Finance, Human Resources, and Transportation.
3) Startups & Entrepreneurship Engine
Startup India (DPIIT recognition): enables easier compliance, IPR support, and access to benefits; plus Seed Fund support routed through incubators to help ideas become employable businesses. Why it matters: Tier-2 startup ecosystems now create localized hiring in sales, product, operations, digital marketing, support, and engineering, even without a metro HQ.
By providing a collaborative framework for building a Smart City and enhancing life in all aspects of the city, investments made in this program will lead to many outstanding benefits for the Government of India, its citizens, and businesses located in Tier-2 cities in the form of improved transportation amenities and options, increased access to improved quality of education, health care, and culture, and increased job creation and economic growth.
Conclusion
The next wave of job creation in India is in Tier-2 cities, and together they provide many opportunities for professional development and employment. In addition to the low cost of living, the availability of multiple industries, including Manufacturing, IT, Logistics, BFSI, and Emerging Technologies, create a perfect storm for job growth in these cities over the next 5 years. These Tiers are also connected by Industrial Corridors, Defence & Logistics Hubs, IT Parks, and Skill Development Initiatives, making them an ideal place for consistent Job Growth for both Businesses and Professionals alike.
