A shifting trend in India’s technology landscape is becoming evident, with 629 companies moving their registered offices out of Karnataka over the past five years, even as Bengaluru continues to remain a key hub.

Shift reflects expansion, not complete exit

Industry experts clarify that this movement does not indicate a complete exit from Bengaluru. Instead, many firms are adopting a hub-and-spoke model, retaining headquarters in the city while setting up additional development centres in other regions.

This approach allows companies to balance Bengaluru’s talent advantage with cost efficiency elsewhere.

Rising costs and infrastructure strain

One of the primary drivers behind this shift is the sharp increase in office rentals and overall operational costs in Bengaluru. As companies expand, the need for larger office spaces becomes more pressing, making high rental rates a significant burden.

Traffic congestion and long commute times have also emerged as key concerns, affecting employee productivity and overall work experience.

New cities gaining traction

Several Indian cities are emerging as strong alternatives for IT expansion:

  • Hyderabad has witnessed rapid growth with robust infrastructure like HITEC City and lower operational costs, with IT exports crossing ₹2.41 lakh crore in FY2024.
  • Pune is becoming a major hub with over 300 Global Capability Centres and a strong talent pipeline from educational institutions.
  • Chennai continues to attract large-scale investments with established IT corridors and exports exceeding ₹2 lakh crore.
  • Coimbatore is gaining attention as a Tier-2 destination with lower attrition and cost advantages.
  • Kochi is expanding rapidly with Infopark hosting over 500 companies and 70,000 professionals.
  • Visakhapatnam and Ahmedabad are also emerging due to policy support, infrastructure growth, and lower costs.

Government incentives and evolving models

State governments across India are actively offering incentives such as tax benefits, subsidies, and dedicated IT parks to attract companies. At the same time, firms are increasingly embracing distributed work models, reducing reliance on a single city.

Bengaluru remains central, but no longer alone

While Bengaluru continues to be India’s leading tech hub, the current trend signals a broader transformation. The IT sector is gradually evolving into a multi-city network, where growth is distributed across several emerging hubs.

This shift reflects a more balanced and sustainable expansion strategy, enabling companies to optimise costs while tapping into diverse talent pools across the country.


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