List of Tier 3 Cities in India
Tier II cities like Ahmadabad, Kanpur, Chandigarh, Patna, Dehradun, Pondicherry, Pune etc have a population of around one million, whereas minor cities with population less than one million like Madurai, Baroda, Nashik and Trichy are termed as Tier III cities.
According to the government, cities with a population in the range of 50,000 to 100,000 are classified as tier 2 cities, while those with a population of 20,000 to 50,000 are classified as tier 3 cities.
If a company has sufficient time, money, and resources to grow their business independently, it may be worth setting up in a lower tier city to obtain cheap real estate and labor.
This means the company needs to be prepared to invest in setting up basic infrastructure and logistics, train local labor in fundamental tasks, and learning to function outside a well-developed business ecosystem.
If a company has presence in a tier 1 city, it could consider moving some of its operations to a nearby tier 2 or tier 3 city to cut operational costs.
A business could explore moving staff engaged in back-end and related functions to a nearby emerging city.
Similarly, manufacturing activities could be moved to smaller cities, while management functions could continue to operate out of the tier 1 city.
If there is an existing industry cluster that is relevant to the company’s business portfolio, a company may find tier 1 capacity at tier 2 or tier 3 costs.
You can download the List of Tier 3 Cities in India in PDF format using the link given below.
