Why Tier 2, 3 cities are rising as India’s most rapidly growing startup hub

Gone are the days when start-ups and entrepreneurship were confined to metro cities. Today, nearly 50% of recognized start-ups in India are located in Tier 2 and Tier 3 cities. The ongoing technology revolution witnessed in Tier 2 and Tier 3 cities is accelerating the country’s economic growth and driving global socio-economic transformation.

Delphine Varghese, Co-Founder and Chief Business Officer, Adcounty Media said that improved infrastructure support, fast internet, favorable working conditions, improved transport connectivity and accessibility to a large pool of talent have all contributed significantly to the growth of small start-ups. cities

Moreover, changing consumer behavior, attributed to increased Internet penetration, has opened up opportunities in the local market, he added. A BCG report revealed that 50% of online shoppers are located in small towns. This number is expected to reach 60% by 2030.

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Pushkar Limaye, co-founder and CTO of Mahindra & Mahindra-backed Carnot Technologies said, “Start-ups in Tier II and Tier III cities have huge potential that needs to be tapped. India is growing and a true indicator of this is whether entrepreneurs dare to dream big in small towns. Whenever we Whether we visit a small town, a rural area or an agricultural fair, we are amazed at how much talent and innovation there is. It always has been, now it is flying with renewed confidence combined with technology and internet penetration.”

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According to WoodenStreet co-founder Dinesh Pratap Singh, growth in India has expanded beyond metros and into the country’s Tier 2 and 3 cities.

Dinesh Pratap Singh says, “Addressing and providing solutions to local problems in various fields like healthcare, education, indigenous, agriculture, etc. is the key reason for the growing number of startups from these parts of the country.”

Additionally, Tier 2 cities like Jaipur, Ahmedabad, Indore and Surat have recorded an economic growth rate of over 40% as larger spaces are available at low and affordable prices, enabling startups to operate on a larger scale, he added.

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“Tier 2 and 3 offer better infrastructure at lower cost. Cost of living and living in these cities is also low. The mindset of people in general about startups in these cities is changing. Availability of both skilled and unskilled people at a lower cost than Tier 1 cities,” said Dr Vishesh Kasliwal, Founder, Mediseva.

Skyrocketing costs and exorbitant rents in metro cities discourage businesses from investing in such locations

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