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Beyond the metros: Startups find scale and talent in India's smaller cities

India’s smaller (Tier-2 and Tier-3) cities are driving a hiring boom, especially in the IT sector, where recruitment surged by 53% year-on-year in June 2025, nearly twice the national average, according to the latest foundit Insights Tracker. And the momentum isn’t limited to the tech sector. In June, hiring for fresher positions also saw an 11% jump, according to Naukri, driven by non-IT sectors such as hospitality, oil and gas, and real estate. Overall, white-collar hiring in Tier 2 cities is now outpacing that in metro markets.

The shift signals a continuing shift in India’s entrepreneurial geography, with 51% of DPIIT-recognised startups today emerging from Tier 2 and Tier 3 cities, including Chandigarh-Mohali, Jaipur, Ahmedabad, Visakhapatnam, and Guwahati, among others. They not only offer job seekers more opportunities close to home but also enable employers to scale up without incurring excessive cost burdens. Fortune India spoke to a few companies that have chosen to build from outside the metros, both by design and necessity. Their stories offer insight into why these smaller cities are becoming vital to India’s growth narrative.

Neelabh Shukla, CBO at talent solutions provider Careernet, sums it up best, saying that startups and GCCs are no longer looking at these locations for cost savings alone but discovering a workforce that is digitally skilled, scalable, remote-ready, and remarkably stable. “As India’s innovation economy decentralises, these hubs are becoming essential to long-term workforce strategy, helping companies scale sustainably while contributing to regional growth.”