Top 7 Cities Where IT Companies Are Moving from Bengaluru

As per recent reports, a total of 629 companies have relocated their registered offices from Karnataka to other states over the last five years. This trend doesn't signify a complete abandonment of Bengaluru. Instead, many companies are adopting a hub-and-spoke model, where the main headquarters remain in Bengaluru, while additional development centers are established in other regions.

One of the primary reasons for this shift is the escalating office rentals and infrastructure pressure in Bengaluru. As companies expand their workforce, the need for more space and the rising rental rates make it increasingly expensive. Consequently, many are exploring alternative cities that offer space and talent at lower costs. Several cities across India are now emerging as strong alternatives for IT expansion.

1. Hyderabad Hyderabad has become one of the most preferred cities for IT companies in India. Many global technology firms have established large campuses in the city over the past decade. The city's appeal lies in its well-developed infrastructure, such as HITEC City, robust government support for the technology sector, and lower real estate and operational costs compared to Bengaluru. Hyderabad’s IT exports crossed ₹2.41 lakh crore in FY2024, highlighting the rapid expansion of its technology sector. The availability of large IT parks and planned infrastructure has also helped companies set up large engineering campuses that are difficult to develop in Bengaluru’s crowded IT corridors.

2. Pune Pune has emerged as a growing IT hub, with many IT service companies expanding their delivery centers in the city in recent years. The city's lower real estate costs compared to Bengaluru make it an attractive option. Pune now hosts over 300 Global Capability Centres (GCCs), making it one of India’s fastest-growing technology and engineering hubs. The city’s strong educational ecosystem, including numerous engineering institutes, provides companies with a steady pipeline of skilled graduates every year.

3. Chennai Chennai, a long-standing IT hub, continues to attract significant technology investments. Many large companies operate some of their biggest delivery centers in the city. Zoho Corporation, for instance, has expanded its engineering teams in the region. Chennai offers a mature IT corridor with multiple technology parks and a steady supply of talent. Tamil Nadu’s IT exports have crossed ₹2 lakh crore in recent years, with Chennai contributing a major share of this growth.

4. Coimbatore Coimbatore has steadily grown into an emerging Tier-2 IT destination. Many companies have set up development centers in the city, attracted by lower employee attrition rates compared to large metropolitan cities. Industry estimates suggest that attrition in Tier-2 cities can be 20-30% lower, helping companies reduce hiring and training costs. The lower cost of living and available talent make Coimbatore an appealing choice.

5. Kochi Kochi is experiencing rapid growth, supported by technology parks like Infopark. The Infopark in Kochi alone hosts over 500 companies employing more than 70,000 professionals, showcasing the growing scale of the region’s IT sector. The city benefits from Kerala’s high literacy rate and skilled workforce, along with lower living costs compared to larger metro cities.

6. Visakhapatnam Visakhapatnam is attracting major companies as the state government actively promotes the city as a technology hub, offering incentives to IT firms. The government of Andhra Pradesh has introduced policies aimed at building Visakhapatnam into a major technology destination on India’s eastern coast. Lower office rentals and improving infrastructure are encouraging companies to consider the city for future technology campuses and development centers.

7. Ahmedabad Ahmedabad is also gaining traction as a preferred location for IT companies. The city’s lower operational costs, improving infrastructure, and government policies focused on attracting Global Capability Centres (GCCs) have made it an alternative to traditional IT hubs. The Gujarat government has introduced several investment policies and IT park developments to attract global technology companies to cities such as Ahmedabad.

Why IT Companies are Leaving Bengaluru - Increasing Operational Costs : The commercial real estate and living expenses in Bengaluru have increased significantly, making expansion more expensive. - Commute : Heavy traffic congestion and longer commute times are major concerns for both companies and employees. - Government Incentives : Many state governments now offer tax benefits, subsidies, and dedicated IT parks to attract and support companies. - Distributed Operating Models : Companies are increasingly adopting the hub-and-spoke model to operate across multiple cities rather than concentrating operations in a single location.

Conclusion The needs of IT sector companies are gradually increasing, and they are looking for greater cost efficiency and access to new talent pools. Cities like Hyderabad and Pune are already hosting major technology operations, while others like Kochi, Coimbatore, Visakhapatnam, and Ahmedabad are building their own technology hubs. As companies continue to adopt distributed work models and search for cost efficiencies, India’s technology sector may increasingly evolve into a multi-city network of IT hubs rather than relying on a single dominant center.