Avoiding Panic in Tier-2 Growth

The geography of opportunity in India is slowly shifting. Tier-2 cities are fast emerging as the focal point of India's next wave of urban and economic expansion.

- AMIT KAPOOR

For decades, the country's economic growth story has been shaped—and often symbolized—by large cities. Metropolises like Mumbai, Delhi, Bengaluru, and Hyderabad became magnets for capital, talent, and infrastructure investment, transforming into dense engines of commerce and innovation. Yet this urban concentration has come at a price—congested roads, unaffordable housing, overstretched public services, and declining air quality have become defining features of life in these booming centers. This dynamic is beginning to shift.

Recent data from the Randstad Talent Insights Report 2025 has been making the rounds for revealing a decisive outward movement in job creation. Between September 2024 and February 2025, tier-2 cities recorded a 42 percent increase in job openings—more than twice the 19 percent rise seen in tier-1 metros. This surge is not an anomaly but the result of broader structural transformations across key sectors such as banking and financial services, manufacturing, information technology, retail, and healthcare.

As economic activity disperses beyond traditional urban centers, it also presents an opportunity for deliberate urban planning. Tier-2 cities like Chandigarh, Vadodara, Gandhinagar, Bhubaneswar, and Aurangabad, which were once peripheral job markets, are now emerging as prominent growth centers. Not only are these cities catching up, but they are pulling ahead in some areas. Vadodara, for instance, has posted strong growth in the energy and utilities, pharmaceuticals, and automotive sectors.