For a long time, India’s infra story has been centred around metros. Better roads, airports, metro lines, logistics hubs – most of the focus has been on our largest cities. And rightly so. That is where the demand was. But that is now beginning to change.
The next phase of growth is clearly shifting to tier-2 and tier-3 cities such as Surat, Jaipur and Kochi. There is clear policy intent behind this shift as well. For example, the INR1 lakh crore Urban Challenge Fund aims to unlock nearly INR4 lakh crore of investments in tier‑2-3 cities.1
Today, transformations are already happening. As digital infrastructure and regional connectivity improve, manufacturing is moving beyond metros and consumption is rising in places that were earlier off the radar. Tier-2 and -3 cities drove 66 per cent of new D2C orders in FY20262 and a similar shift is visible in logistics and warehousing, where they already account for over 100 million sq ft, nearly 18–19 per cent of total stock.3 Technology is further accelerating this shift, with tier‑2 and ‑3 cities emerging as digital hubs. Data centre capacity in these cities is about 82 MW today and is expected to grow four times by 2030.4 The impact is visible in job creation too: in FY26 alone, start-ups added nearly 5 lakh jobs, increasingly across non‑metro states such as Uttar Pradesh, Gujarat, Rajasthan and Kerala.5
This is just one part of the picture. Growth is expected to only go upwards from here. Estimates suggest that by 2030, tier-2 cities alone are expected to generate USD2 trillion in economic output – up from around USD690 billion, which is nearly a threefold increase.6
