Tier 1,2,3 Cities in India - Summary
Tier III cities in India refer to smaller cities with populations of less than one million, such as Madurai, Baroda, Nashik, and Trichy. On the other hand, Tier II cities like Ahmedabad, Kanpur, Chandigarh, Patna, Dehradun, and Pondicherry boast larger populations of around one million.
Understanding Tier III Cities
According to government classifications, cities with populations between 50,000 and 100,000 are known as Tier II cities, whereas those with populations from 20,000 to 50,000 are classified as Tier III.
For businesses aiming to expand, venturing into a Tier III city can be a wise decision. This strategy allows companies to benefit from lower real estate prices and reduced labor costs. 😊
Benefits of Setting Up in Tier III Cities
However, businesses must be prepared to invest both time and money. They will have to focus on developing basic infrastructure, managing logistics, and training local staff in key functions. Adjusting to a less developed business environment can also form part of this exciting journey.
Companies currently based in Tier I cities can find it economical to shift some operations to nearby Tier II or Tier III cities. For example, employees working in back-end roles could be relocated to these up-and-coming cities.
Additionally, manufacturers can migrate their processes to smaller cities while retaining management teams in Tier I locations to ensure efficient operation.
If there are existing industry clusters that align with a company’s objectives, they may discover that Tier III and Tier II cities can provide Tier I capabilities at a much lower cost, making them an attractive option for potential growth.
For detailed information, feel free to download the PDF below.
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