Smaller Indian Cities Face Major Hurdles in Tech Hub Expansion

Infrastructure Shortfalls

India's effort to expand global capability centres beyond major tech hubs faces two main hurdles: poor basic infrastructure and a shortage of specialized skills. A report by 3AI QuantX estimates a twenty to twenty-five percent gap in advanced artificial intelligence and data roles, with severe shortages in areas like MLOps, LLMOps, and agentic AI. Less than fifteen percent of available workers currently have end-to-end artificial intelligence lifecycle skills. Meanwhile, thirty-five to forty percent of global capability centres could lead product engineering and artificial intelligence platforms by 2026, up from twenty to twenty-five percent in 2022.

Talent and Policy

Mona Agarwal, Managing Director at ETS, noted that bad roads, poor connectivity, and weak social infrastructure can scare off global headquarters executives who visit smaller cities like Nashik. However, Tier-Two locations offer lower staff turnover because workers enjoy shorter commutes. To keep these employees, firms must provide the same career growth paths found in big cities. The central government is also working on a national global capability centre policy focused on single-window clearances and digital document lockers instead of cash incentives. States including Uttar Pradesh, Karnataka, Telangana, Haryana, and Tamil Nadu already have their own policies in place. Overall, India's sector includes more than twenty-one hundred centres with over twenty-three lakh workers, while the government aims for roughly five thousand centres by 2030.