The next wave of Japanese investment in India may bypass Bengaluru and Hyderabad. Japanese companies are considering tier-2 cities for their GCC expansion strategy due to lower operating costs, growing talent pools, and generous state-level incentives, according to a report from Deloitte titled \u201cIndia\u2019s Strategic GCC Play for Japanese Enterprises.\u201d<\/p>\n
In India, the GCC industry continues to be heavily concentrated in big metros, with almost 95% of the centres in tier-1 cities. The trend of moving to smaller cities was already beginning to take shape, with 5% of newer GCC establishments during 2025-26 coming up in smaller cities, the report said.<\/p>\n
Places like Ahmedabad, Jaipur, Coimbatore, Kochi and Indore are generating interest. These cities provide a mix of cost efficiency and access to specialised engineering talent, especially in digital technologies, cloud support and healthcare-related functions. For Japanese firms, these centres are a way to expand without the cut-throat competition and wage inflation that exist in larger technology hubs.<\/p>\n
Also read: Japan\u2019s ageing workforce is creating a Rs 50,000-crore opportunity for India\u2019s GCC industry<\/a><\/p>\n States with specific GCC policies are further driving this trend. Karnataka, Gujarat, Maharashtra, Rajasthan, Tamil Nadu and Andhra Pradesh have come up with incentivisation schemes of different kinds, like capital subsidy, rental support, patent reimbursement and exemption from electricity duty. Such policies attract knowledge-intensive investments and develop regional innovation ecosystems.<\/p>\n The economics are favourable. Deloitte states that Japanese companies can set up GCCs in India at a cost that is about 30-40% lower than alternatives and have access to a scalable talent pool. Furthermore, the smaller cities may have the additional benefit of potentially lower attrition and a more stable workforce, factors that are in line with Japan’s preference for developing long-term institutional knowledge.<\/p>\n For the regions of India, the impact could be substantial. As more companies look beyond traditional technology hubs, tier-2 cities will get high-value jobs, research mandates and engineering investments. Deloitte\u2019s report suggests that the future growth of India\u2019s GCC sector will increasingly depend on how well these emerging locations integrate into the broader innovation economy.<\/p>\n Follow Storyboard18 on Google<\/a> for the latest and breaking how it works news<\/a> and industry updates, along with in-depth coverage of digital media and media & entertainment news<\/a>. Stay informed with the latest perspectives only on Storyboard18.<\/p>\n First Published on\u00a0July 3, 2026, 15:58:44 IST<\/p>\n","protected":false},"excerpt":{"rendered":"The next wave of Japanese investment in India may bypass Bengaluru and Hyderabad. Japanese companies are considering tier-2…\n","protected":false},"author":2,"featured_media":524725,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[114,184,85,46],"class_list":["post-524724","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-il","tag-israel"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/524724","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=524724"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/524724\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/524725"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=524724"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=524724"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=524724"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}