India’s Services Delivery Landscape: Where to Play and Win across Tier-1/2/3 Cities

India remains the most extensively leveraged location globally for delivering a wide range of services. Its vast and diverse talent pool, strong cost competitiveness, and supportive operating business environment drive this leadership. The country continues to serve as a strategic offshore partner for major markets, including the US, the UK, and Europe, enabled by a talent ecosystem aligned to follow-the-sun delivery models. Beyond transactional work, India is increasingly delivering complex services, with engineering research and development, product engineering, and digital services including AI, ML, and cybersecurity, emerging as key growth areas.

Tier-1 locations, including Bangalore, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai, and Pune, account for ~80% of the overall services market in India. However, owing to increasing cost and margin pressures, rising attrition levels, and intensifying competition, organizations are actively exploring tier-2 and tier-3 cities. This shift is enabling them to access an untapped talent pool at lower attrition levels and operating costs, while also mitigating concentration risks in tier-1 cities.

This report will support market providers in their quest to support the right service from the right location within India. It highlights the relative attractiveness and value proposition of key tier-1/2/3 cities for supporting services delivery, based on a multi-faceted assessment.